Fresno Real Estate – Bottoming Out?
Posted by Harold Penner on Wednesday, July 14th, 2010 at 4:35pm.
April 2009 --
During the past 30 days, there has been a marked change in Fresno and Clovis, California real estate. Most notable is the marked decrease in homes for sale in Fresno County in all categories (short sale, foreclosure and seller-owned homes).
The most dramatic is the reduction of foreclosure properties which have been steadily rising for the past 2 years. The average number of available foreclosures in Fresno and Madera County climbed throughout 2008 and in January 2009 averaged 1500 homes on the market. In February, that number dropped to 1,231 homes and in March it dropped further to 884 homes.
Now, there are some national trends that could have effected this drop and it is possible that this is just a blip in our real estate numbers. One of those trends is that some major banks had implemented a “foreclosure moratorium” in which they temporarily delayed processing upcoming foreclosure properties while determining if new legislation would be beneficial for their bank and their homeowners. So, the drop in foreclosures could be attributed to that. These moratoriums have concluded so we will be watching next month how that effects our foreclosure numbers.
Another uncertainty is how federal incentives such as the first time home buyer tax credit, loan modification assistance and other upcoming programs will impact local real estate.
But, here are the reasons for why I’m becoming increasingly convinced that Fresno real estate has reached the bottom.
First, there are less homes available in all categories, not just foreclosure properties.
Second, even though there are less homes available, the number of sales in all categories is increasing. In February 2009, there were 457 foreclosures, 52 short sales and 119 seller-owned homes that were sold in Fresno County. In March 2009, despite there being fewer choices, there were 536 foreclosures, 73 short sales and 203 seller-owned homes sold in Fresno County. Even more telling, there are more pending properties in escrow today than have been sold in the past 3 months combined. So, this trend of increased sales is continuing.
So, what does this mean for you?
Sellers -
This is the ideal time to upgrade your home. In the past months I have advised sellers to wait until their house sells to begin looking to buy. There wasn’t enough demand for houses to ensure that homes would sell quickly.
Sellers - Click to request Free Assessment of the value of your home.
But, with the current market conditions you can now search for homes and sell your own concurrently. You will be selling your home for a lower price, but then buying another for a similarly low price. The difference is that right now, you can sell with ease.
This will not always be true. Historically, the Fresno market experiences sharp increases or decreases in prices and then settles into a plateau in which price and demand do not adjust for between 5-10 years. While we cannot guarantee that this pattern will repeat for this real estate cycle, it is likely to do so. Right now sellers will sell and buy low, but they can do so quickly with minimal carrying costs. Once our market reaches that price plateau, there will be increased competition, longer amounts of time on the market and more incentives offered by sellers in order to attract buyers.
Buyers –
I am advising all my buyers to actively look and buy quickly to take advantage of the current prices. This is especially true for first time home buyers who qualify for the federal tax credits. Those will only apply to homes purchased and closed before November 2009.
Buyers - Click to request custom online search of available homes!
MARCH 2009 MARKET STATISTICS* - Fresno and Madera Counties
- Average Price of Sold Homes in March '08 vs. '09 - $261,613 vs. $193,192 (40% Decrease)
- Sold Homes in March '08 vs. '09 - 388 vs. 962 (Doubled)
- # of Foreclosures and Pre-Foreclosures Sold in March '08 vs. '09 - 185 vs. 746 (Over 600% Increase)
- Avg. Loan Percentage Rate in April 2009 – 5.0% (30 Year Fixed)
*Unless otherwise indicated, all stats are based on residential sales in Fresno and Madera counties.
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