Chico Investors Reappear
May 18th, 2008 Categories: Chico CA Real Estate News
by Mike Wiegert
Last week I mentioned that, for the first time in months, residential homes available in the Chico area actually appeared to increase as well as the number of residential units sold.
As we are starting to see signs of stabilization in many California communities a long lost friend of the real estate industry is making a reappearance. I’m talking about the real estate investor. As prices hit record highs at the mid point of the decade, investors all but vanished from the scene. The primary reason appeared to be that as prices soared, the possibility of “cash flow” on investment properties evaporated. With residential and residential income (non-owner occupied) properties at record highs, investors saw little opportunity to “capitalize” or see a desirable return on their cash investments into these properties. With dramatic decreases in property values across the state and nation, investors are starting to emerge and with this reappearance, further strengthening and stabilization of the real estate market is calculable.
Right here in our little corner of the world, the Chico Multiple Listing Service (MLS) “solds” (closed escrows) and five “pendings” While fifteen sales in April might might not seem earthshaking it really is a dramatic increase from January when Chico MLS reported six “solds” and no “pendings” for that month. The numbers are even up significantly from March which reported “solds” at five and “pendings” at two reported last month ten residential income (properties placed in escrow but not closed).
Chico CA real estate statistical reporting is certainly micro-economics, but across the state and nation were beginning to see the same trends. S.F. Gate, a part of the San Francisco Chronicle news reported last week a story about Dan Shiner, a Mill Valley real estate investor examined a dozen different Sonoma County residential income properties and purchased two. “This duplex sold for $599,000 two years ago and now it’s listed for $414,900. That’s why people like me are coming out of the woodwork.” Shiner, who works in financing, shied away from real estate in his area because of inflated prices but now feels drawn back into the market because of many available “bargains”. These type of bargains in our area and the competition to purchase investment homes with “cash flow” is steadily growing.
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