Fresno Housing Trends

The city of Fresno was first created as a railroad stop in early California during the 1870s when much of the California Central Valley was either farming communities or property slated for train tracks and new exchange places for goods. Today, the city is the largest urban center for the mid Central Valley, providing both a banking and financial headquarters as well as a government and agricultural center for the larger region. It’s no surprise that every level of government has an office in Fresno, from the federal IRS office and Department of Justice to the local CSU Fresno university and city offices. The area of Fresno is also often a story of two towns: the downtown core which has seen better days, and the more developed and newer Clovis region to the northeast. In between are various neighborhoods, the state university campus, and various business centers. Within a few minutes’ drive, however, in any direction a person is quickly back into the farm basket of California, an agricultural basin that provides most of the U.S. specialty crops and plenty of its homegrown food.

Demographics

The city of Fresno is a mid-size urban center of approximately 516,000 residents. The population is generally younger and middle-age, with only 10 percent of residents over 65 years of age. Gender is just about evenly split 50/50, and minors make up over 30 percent of the population. In terms of background, the population is approximately 50 percent Caucasian, and about one-third Hispanic. Asians and African-Americans make up the remainder with a smattering of other cultures. 20 percent of residents are foreign-born, and the same percentage of the population has a college degree or higher. Finally, the median household income is just over $42,000 annually.

Market Trends for Real Estate

The Fresno market has continued to rise on a valuation trend being seen across the state with rising price points year over year. 2015 for Fresno real estate was up a modest 3.5 percent compared to 2014 when it came to cost per square foot, now estimated at an average of $123. The median home sale price into the last quarter of the year broke $200,000, based on more than 1,200 units at play in the local market. The current market actually has a mix of about 65 percent traditional sales and 35 foreclosure related inventory, totaling almost 2,000 units in gross. The average listing start for a home in Fresno is just under $245,000 into December 2015, signaling a slight winter slowdown from the earlier summer highs. This is also a 6 percent increase in price level for sales compared to 2014. The highest listings for the region were between $300,000 to $350,000. While the large inventory base may seem like a damper on pricing. In reality, the Fresno market is seeing shrinkage. 2015 figures in the last quarter are reflecting an 8 percent decrease in inventory versus 2014. Much of the movement, however, is in the traditional home market, with distressed properties staying about the same figure-wise. A good number of properties, over 300, have made downward price adjustments in the last quarter to help move sales better. Long story short, Fresno properties are moving and there is demand on a limited inventory pool that is getting smaller. That overall trend will increase and build more strength next spring if the inventory figures do not suddenly spike upward again. Even the local higher unemployment rate versus the state in general is not dampening the mood, and even that economic factor is starting to reverse.

The General Economy

Many in Fresno believe the area is now in full swing recovery out of the recent Recession. Fresno was probably one of the slower communities to recover, but the general economic picture is pushing positive for the Central Valley city now. Fresno has spent a good amount of time being considered a backwater city, being one of the last to turn things around because it wasn’t primarily on the beaten path of traffic, like San Francisco, Los Angeles, and San Diego.

However, in reality, the Clovis region on Fresno’s northeast side has a been a powerhouse of new development, new housing, and new business growth. The area is producing jobs, discretionary spending, and more families are moving in as well. All three have been on a steady path for the last year and half in the most conservative of measurements and indicators for the area. The area overall, including Clovis, is susceptible to impacts in the agricultural industry and manufacturing, so trouble in the Los Angeles ports can reach all the way up to Fresno easily. However, most experts believe such an event will just be a mild correction stall before Fresno’s growth continues to move forward. The one stalling aspect that Fresno has struggled with for years, however, has been non-agricultural employment and a higher than normal related unemployment rate. That, too, has turned around, and the Fresno region has more people employed in regular work than in a number of past decades.

The Outlook Forward

The majority of experts are in agreement the odds for Fresno to continue its real estate growth and strength are good. A positive forecast is expected through 2017 at least, which again is consistent with most estimates for market behavior statewide. Granted, there’s always room for correction and better data, but many in the industry are giving Fresno a thumbs up for continued improvement at least over the next two years. This will inevitably push home prices well into price points that Fresno has not seen for a long time, and it remains a balance if the city can continue to meet demand while at the same time finding new work and new income sources to keep lowering its local unemployment rate.