Chico Real Estate Market Report April 18, 2008
April 18th, 2008categories: Chico CA Real Estate Market Stats, Chico CA Real Estate News
by Mike Wiegert
While the rest of the world continues to shroud itself in a cloak of doom and gloom, our Chico real estate market appears ready, able and willing to go to the 15th round.
All type of media ranging from the daily newspaper to “expert” fiscal commentaries on various internet news services to regional and local blog sites are all assuming the role of a sort of economic Edgar Allen Poe. I can’t speak for everyone, but I’m not just tired. I’m exhausted, wiped out and drained by all the tales of woe that doomsayers consider newsworthy.
It’s time to stop assuming that just because a home down the street went through a foreclosure that this is the end of Chico real estate as we know it. As pointed out in previous “moments”, foreclosure sales nationwide only amount to seven tenths of one percent of all the households in our country. Due to the reseting of adjustable rate loans and a subsequent inability to pay by the borrowers on these loans, the rate of foreclosures is certain to rise. But with all the government and banking industry sponsored programs to assist these troubled homeowners, any foreclosure rates increases are assured to be negligible.
Let’s look at some hard facts derived from statistical reporting by our Chico Association of Realtors. Historically, the first quarter of every year is a “seasonal” slow quarter as many sellers and buyers anticipate the brisk activity of the spring and summer housing markets. The first quarter of 2006 statistics revealed 178 residential sales in all of the Chico sectors. The average market sold price for these sales was $361,166 giving us a total volume of sales of $64,287,548. The 2006 first quarter is considered to be one of the most active quarters in local real estate history. The first quarter of 2008 showed us 162 residential sales with an average Chico sales price of $336,926. The total volume of sales for this quarter was $54,582,012.
So let’s crunch some numbers and interpret this data. Using these hard numbers, sales in the first quarter of this year lagged fifteen percent behind the first quarter two years ago. When comparing average sales prices of these quarters we see that the average sales price of this year’s quarter is down seven percent from the average sales price of the 2006 first quarter.
Ask ten economists how much prices have dropped and you’ll probably get eleven answers but these local quarterly statistics are as good an indicator of pricing as any.
So it’s time for all you woe-begone town criers to blow your noses, put down your Kleenex’s and stop using sensationally negative national news to harm our virile local economy. For years people have asked me, “Mike, how does your town survive with little or no industry.” My answer, “Inexplicably, it does”. Over thirty years ago when I started in the real estate business the nay-sayers were out there. I was told this town would never survive. But it has and it will continue to not only survive, but thrive. I’ve seen many down cycles locally, but our area like many, always pulls out of it and experiences safe and positive growth.
Thanks Mike for a fact-filled journey about Chico. How do you survive anyway?
Hi Terry,
Glad you enjoyed my article. Although Chico really does have some “industries” like California State University, Chico and a very strong agricultural economy (nuts, prunes, strawberries and kiwi’s) our town has alway been primarily a service industry town for the people that love to live here. Bidwell Park, one of the largest municipal parks in the country is a big draw. We’ve has some large industries like Fleetwood come and go, and still we keep on going.
Mike
I was very happy to see you point out that just because the house down the street went through a foreclosure doesn’t mean every house for sale is headed down that path. The media has certainly done a disservice by overblowing the foreclosure situation. Seven-tenths of one percent is certainly a far cry than what the public perceives the foreclosure market to be. Good Job!
Sandy Sibley