The Chico Real Estate Market: Turning the Corner?
April 13th, 2008categories: Chico CA Real Estate Market Stats, Chico CA Real Estate News
by Mike Wiegert
There’s a lot of talk in the news these days about the end of the housing slump, home prices stabilizing and increases in real estate sales activity in the West. Last week while speaking at a banking conference in Tokyo, former Federal Reserve Chief and guru Alan Greenspan announced that he expects an end to the drop of U.S. home prices by early in 2009. Greenspan added that as housing inventory is reduced, “it is very likely that home prices will stabilize well before that.”
In nearby Sacramento county, an area among the highest in U.S. foreclosures, a recent survey of 1200 residents indicated that 63 percent believe that now is a good time to buy a home. The study conducted by Sacramento State University’s Institute for Social Research fine tunes the data by stating that 47 percent believe that now is the right time to buy and 16 percent believe that between now and six months will be the best time to buy. Additional, less than comforting information, is that 58 percent said that they have concerns that their income will be insufficient to cover their expenses.
Outskirt communities of San Diego County such as Oceanside, Escondido, Valley Center and Ramona are experiencing a burst of new activity as buyers and investors take advantage of significantly lowered home prices. Brian Crisp, a San Diego broker has stated in the North County Times that investors are pouncing on deals in high numbers. “Mostly investors will look to fix up a home and sell it for a profit. But some homes are so deeply discounted that investors can rent them for a profit” says Crisp. “My business had doubled just in this month. And I’m seeing some cash-flow potential with a lot of deals lately,” he said.
Oceanside Realtor, Kurt Kinsey recently listed a home in Oceanside for almost 40 percent below it’s 2005 sales price. Kinsey was flooded with 31 offers from interested buyers. “I’ve done this for 21 years and even in a hot market, I think the most I had was nine (offers),” he said. “I think we might have turned the corner as far as falling prices.” Kinsey continues by saying that not all deals are snatched up by investors. Of the 31 offers on the home listed at $340,000, all but one were from buyers actually intending to live in the home.
The National Association of Realtors Pending Home Sales Index which measures pending sales contracts and is a barometer of future home sales activity saw a rise of 2.1 percent in the west region for the month of February.
This region, which includes California was expected to drop by .7 percent according to economists and analysts.
A survey of Chico real estate brokers indicate a flurry of calls and inquiries about listings particularly in the sub-median price ranges. These brokers tell me that they are seeing an emergence of not only investors but owner-occupant buyers as well. One southeast Chico neighborhood home, recently listed for $199,900, was deluged with eight offers. In my own office, Sandi Bauman’s two college area duplexes received two competing offers within hours of the sign going up. As we now experience new activity in the sub-median and median prices it won’t be long until the price ranges above these levels also gain sales activity as once-be sellers become buyers seeking to replace their modest homes with more suitable environments for their growing families.
