So, what is this new normal for Fresno and Clovis, CA? Selling prices have barely budged in the past six months with a high of $95 per sq. ft. and a low of $93. The average property selling today in Fresno County is a 3 bedroom, 2 bathroom home of approximately 1,700 sq. ft. selling for about $172,000. That is true whether you bought the house today or six months ago.
The reality of distressed properties dominating sales is also a steady part of today’s market. This past month (November 2010), 42% of all homes sold in Fresno County were foreclosures. Adding short sales to the mix equates to well over half (57%) of all homes sold this past month being owned or approved by banks. Interestingly, these are almost the exact statistics of a year ago. Prices fluctuated slightly more in 2009 but the ratio of bank owned/short sale properties versus seller owned sales was identical to 2010.
Successful short sales have been gaining ground though. The number of foreclosures has been steadily declining and short sales are slowly increasing. This trend is a benefit to buyers as the condition of the home typically improves when owners remain in the home until close of escrow. With a foreclosure, the home is often vacant for at least six months prior to selling. Pricing, though, has not been effected by this change.
There have been, of course, some neighborhoods that have dropped in value more than others. The neighborhoods with the highest percentage of variance in price are either comprised of new home developments or much older areas of town. Northwest Fresno (93722 and 93711 zip codes), for example, experienced a drop of 3% in prices during the last six months ($100 per sq. ft vs. $97 per sq. ft.). Northeast Fresno (93720, 93730 zip codes), in contrast, is a more established area kept a steady selling price of $121 per sq. ft. during the same time period.
There are a few reasons for this. Foreclosures and short sales are more common in home developments that were built during the height of the market in 2005/2006. Some areas may have been developed prematurely during the building boom and there is simply not enough demand to fill all the homes. The more established neighorhoods are also closer to shopping, grocery stores and commercial development.
So, what do I predict for 2011? More steady trends of this new reality. No real surprises for buyers or sellers in terms of pricing. Loan rates have been inching upward recently (currently around 4.875% for a 30 year fixed) but are still historically low.
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*Unless otherwise indicated, all stats are based on residential sales in Fresno and Madera counties.