This post first appeared on Minyanville and on our sister site Dawn Patrol.

Reports are out this morning opining that Stockton, California represents a new hope for housing recovery. Hoping Stockton will lead the housing recovery is about like saying Alex Smith will lead the niners to the Super Bowl. It lacks a link to reality.

The recent rise in home sales transactions, especially in high foreclosure areas, is primarily attributable to the billions of dollars raised by hedge funds and other distressed investors. They’re starting to get pressure to put the money to work. It’s not evidence homebuyers are stepping back into the market.

Funds are trying to arbitrage the house, buy it at 60 cents on the dollar from a desparate bank and sell it for 80 on the open market.

The problem is, the marginal homebuyer in those areas does not have the 20% down payment it now takes to buy a home, even at ‘discounted’ prices.

Transactions may rise, but mortgage backed securities don’t pay bond holders with realtor sales commissions.

If the bottom is called by the right media outlets, sellers still waiting on the sidelines will flood the market, trying to get out in a market that’s not completely frozen.

Woosh, part deux, coming to a housing market near you in early 2009.

This morning’s property’s is located in Stockton, CA — what more needs to be said? Guess the value by adding a comment at the bottom of this post.

(Click for a large image)

Home Details:
- 1740 West Lane, Stockton, CA 95205
- 3 bedrooms
- 1.5 bathrooms
- 1,224 square feet
- 0.23 acres
- Built in 1951
- Recent sale: 4/6/06 for $300,000

“This 1/4 lot with a huge backyard w/ alley access. RV access and storage. Must see!! Do not disturb occupants – sold as is, sellers not providing any reports or clearances.”

Good luck!

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From time to time, Cirios Real Estate posts a home listed in California as its “House of the Day.” We then post a valuation assessment completed by our team of property value experts. We encourage our readers to post comments and participate in a discussion about the home’s value.

Cirios Real Estate has no buying or selling interest in any of the homes we evaluate, they are posted here for the benefit of our community. This analysis is a broker’s opinion of value and is not to be construed as an appraisal.