Report: Fresno home prices continue to defy national market trends

published on January 26, 2023 – 10:27 AM
Written by Edward Smith

Fresno home values continue to defy current market trends as prices in other major California metros plummet. 

Despite record increases in interest rates and drastic drop-offs in buyers, home values still rose month-over-month in December, increasing nearly 1% to $396,000, according to a report from California Association of Realtors. Year-over-year, prices stayed nearly the same, increasing only 0.3%.

In Tulare County, prices dropped 2.3% month-over-month, but still gained 10.5% year-over-year.

In comparison, home prices in San Francisco declined 11.5% month-over-month in December, said Charlie Dougherty, an economist with Wells Fargo. In Southern California, declines in home prices averaged only 1% month-over-month.

Turbulence in the tech sector attributes to the major declines in the Bay Area.

“There’s a lot of variability even within the State of California,” Dougherty said.

The rise in interest rates took many buyers — especially first time home buyers — out of the market.

In 2021, rates averaged 3%. In 2022, those rates hit as high as 7%. They came down to 6.36% in December, according to Wells Fargo data.

Though the area fared better in terms of number of sales, it was not immune to drops from the highs it experienced in 2021.

The number of sales dropped 38% year-over-year, compared to the state average of 44%.

Nationwide, home sales were down 34% with the 4.02 million units sold — the slowest pace since November 2010.

More affordable areas have held out stronger than less affordable areas, Dougherty said.

A report from Construction Coverage shows Fresno had the eighth largest increase in housing inventory from Q3 2021 to Q3 2022, adding 258 homes, or 48.9%.

Bakersfield ranked just ahead of Fresno with a 49.1% increase, adding 298 units.

Many potential sellers are still opting to stay in their houses longer, said Dougherty. Eighty-five percent of mortgage holders hold a rate lower than the current one, he said, which doesn’t give them much reason to buy a new home at a higher rate. It will take a drop in rates to bring buyers — and sellers — to the market.

 

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