Vallejo's home real estate poised to soar

VALLEJO (KTVU) -- The former Navy town that fell on hard times when the military pulled up stakes and left several years ago is poised to become a residential real estate star.

The low housing costs in Vallejo are changing the city's image from rough and tough to bargain buys.

For the last five months, a series of national surveys shows that Vallejo has been and remains the No. 1 hottest real estate market in the United States.

Linda Daraskavich, a realtor for Coldwell Banker who is also the president of the Solano Association of Realtors, said buyers are snapping up homes.

"It's the prices (and) the weather," she said. "I think people are just realizing it now (and) they see we have ferry service to the city which is a big attraction."

"The ferry will definitely get you around a lot of the traffic and it makes it a manageable commute," said economist Felipe Chacon who is with, the San Francisco-based national real estate price tracking company. "You don't have to worry about driving."

The reason for Vallejo's success has to do with the runaway home prices in other parts of the Bay Area, officials say.

"It's one of the last kinds of affordable places by Bay Area standards," Chacon said. "You can still get a house in Vallejo for about half the price of these other markets like San Francisco, Oakland or San Jose."

Unlike Tracy, Stockton and other far flung towns, Vallejo is reasonably close to the city. That means that buyers and renters are flocking to the former Navy town and, by doing so, raising purchase and rental prices well ahead of the national average increases.

The city boasts several bargains like a 1,000-sq. foot home with three bedrooms, a fireplace and two-car garage that was recently listed for $359,000.

What the final price will be, however, depends on the number of offers the seller gets.

"You're gonna see 5-to-10 offers on (that) property," Daraskavich said, adding that offers will come in 4-5 percent higher than the listed price.

In Vallejo's more upscale Hunter Ranch area, a 2,600-sq.-ft., four bedroom home with 2 1/2 baths is currently listed for $500,000.

The for sale signs are few and far between and that's a problem, experts say.

"The inventory is about a month and two weeks so there's limited inventory," Daraskavich said. "That's pushing the prices up."

She said many sellers move out of state while many buyers come from San Francisco and San Jose. Trulia says houses sell faster in Vallejo than they do in San Jose, among the fastest markets in the nation.

By KTVU reporter Tom Vacar.