Homes dip into the $200,000s

By JENNIFER HUFFMAN
Register Business Writer

If you thought the days of a $200,000 starter home in Napa were gone, think again. A number of neighborhoods in Napa and American Canyon have reached new levels of affordability.

But declining values have meant tough times for some homeowners, including a number on Harrison Avenue in Napa.

This Westwood street of about 60 homes built in the early 1940s is just two blocks long. Back in late 2004 and early 2005, a number of the typically 800-square foot homes on Harrison Avenue sold in the low-to-mid $400,000s.

Between March and July 2008, five of those homes foreclosed. Another three are in pre-foreclosure, meaning the owners must renegotiate their debt or make arrangements to stave off loss of the properties to banks and other lenders.

“I don’t think Westwood is the only place this is happening,” said Melanie Muters with Heritage Sotheby’s International Realty. Muters has a bank-owned listing on Harrison Avenue.

“It’s a widespread problem.”

In fact, the problem is typical for areas around the state where sales or new home construction were brisk in 2005 and 2006.

“The homes (on Harrison Avenue) were purchased a few years ago and now they’re not worth as much, so it leaves people upside down” in terms of equity, said Muters, meaning the house is worth less than what the owner owes on it. Other homeowners fell victim to adjustable rate mortgages, she added.

The majority of the foreclosed Harrison Avenue homeowners from the last five months were between $10,000 and $13,000 delinquent on loans, according to a review of title company reports for all Napa County foreclosures between March 10 and Aug. 6, 2008.

Today, five homes on Harrison Avenue are listed for sale in the low $200,000s.

All are either bank owned or are so-called short sales. Short sales occur when an owner attempts to sell a home for less than the loan amount.

Last sold for $424,000 in February 2005, Muters listed 5 Harrison Ave. at $231,900. The home foreclosed in March 2008.

Other listings on Harrison Avenue include bank-owned 9 Harrison Ave. Currently listed for $250,000, it last sold for $400,000 in November 2004.

Bank-owned 131 Harrison Ave. is listed for $249,900. It last sold for $435,000 in April 2005.

Muters’ listing at 5 Harrison Ave. may be off the market. Muters said an investor who will likely turn the home into a rental has made an offer.

But the house next door is for sale. It’s also a foreclosure.

“A cute little house in the $200,000 range will definitely attract a first-time buyer,” said Muters. ”In Westwood or anywhere else.”

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