Fresno Real EstateThe Fresno real estate market saw little or no upward movement while most of the California real estate markets were enjoying exponential growth in home price appreciation in the late 90s. But, after a decade of hibernation, the Fresno real estate market finally woke up and took off in 2001!
Since 2001, home prices in Fresno have appreciated well over 20% from year to year. This has resulted in Fresno homes appreciating about 100% or doubling in price in the last 5 years.
As of December 2004, median home prices in the Fresno area now stand at approximately $250,000. In comparison, median home prices in California are now well over $450,000.
While Fresno homeowners are undoubtedly delighted with the appreciation in home equity, it does not come without a price. Less and less people are able to afford to buy a home as the Fresno real estate market continue to prosper.
In Fresno County, the affordability has nose-dived from 41% in 2003 to 27% in 2004. This means that only 27% of households in Fresno County can afford to purchase a median-priced home, assuming a 20% down payment and current taxes and mortgage rates.
The Santa Barbara region was the least affordable in the state at 9%, followed by the Monterey region at 11%. About 15% of households can afford a median-priced home in the San Francisco Bay Area compared to 19% in the state overall.
With rocketing prices, it has become increasingly difficult for first-time homebuyers to enter the real estate market.
First-time homebuyers face various hurdles besides escalating home prices such as finding the down payment money, understanding credit scores and their effect on getting loans and comprehending the gazillion loan program options from No Doc to no money down.
Moreover, if you are new to real estate, you will need to learn the real estate language and the real estate buying process.
In California, the percentage of homes in the real estate market that were sold to first-time homebuyers have plummeted to an all time low of 26% in 2004. It is not easy being a first-time homebuyer in general but the situation is amplified in Fresno and the rest of California.
Nevertheless, according to the California Association of Realtors, the central valley real estate is still the 2nd most affordable region in California (most affordable is the High Desert area).
The fastly-appreciating prices have also alerted real estate investors to the area. The Fresno real estate is still relatively affordable when compared to the rest of the state. As such, many real estate investors have flocked to the Fresno market to take advantage of the fast appreciation and "lower prices", further increasing the real estate demand.
Real estate investing has become increasingly popular in recent years due to attractive low interest rates, a strong real estate market and the inability of investors to find better returns on their investment.
A real estate slowdown has been forecasted and speculated many times but at the end of the day, real estate is all about supply and demand.
When there is high demand and low supply, prices will continue to rise. When supply exceeds demand, prices will then start to fall.
In the Fresno real estate market, home prices are still relatively affordable when compared to the rest of California. This has and will continue to attract many families to move to this area.
Moreover, the economy in the Fresno area is continuing to grow. In fact, the Fresno region has ranked in the top 10 for job growth during the past 4 years.
With a healthy economic growth and steady real estate demand, it is highly likely that the Fresno real estate market will remain robust and home prices will continue to appreciate.