September 2010 – The single family home market is amazing. The drastic drop in home prices combined with the very low interest rates and government home buyer incentives generated a huge number of buyers. The inventory of homes in Fresno/Clovis dropped from a high of 9 months of inventory in Sept of 2007 to a 3 month inventory today.  Today, without the government incentives, we see multiple offers on homes that are well priced and in decent condition.  About 60% of the homes sold are bank owned and 30% are short sales so the supply is driven by foreclosures. Prices are beginning to rise as a result of the lack of supply.  In the 12 month period ending 3/1/2010 median priced homes in the Fresno area increased by 14% from $140,000 to $160,000.  I do not expect this level of price increase to continue but it does indicate a bottoming of the market.   Future prices will depend of the number of foreclosures and interest rates.  If the number of foreclosures falls and interest rates remain stable - we will see a rise in home prices.  If we see a rise in interest rates this will lessen demand and prices may remain stable.

Safety: In a normal market single family rentals are considered one of the safest investments available. Rental rates rarely if ever, decline. Vacancy is extremely low.  We see many of the displaced homeowners searching for homes to rent. Tenants of homes are more stable than apartment dwellers so you have lower maintenance and vacancy costs. Homes also offer the best inflation protection available.  In the event you need to cash out, there is normally a market for houses. Remember, multi-family units are purchased only by investors. Houses are purchased by owner occupants and investors.

Profit Potential:  There exists in Fresno a shortage of inventory of single family homes at this time.  This means that there is a short window of time before the market adjusts where the wise investor can get some great deals. The greater Fresno market has seen remarkable depreciation in the past three years. Home prices have dropped about 44% in that time. With the population of this area predicted to double in the next thirty years I do not see how this market can go anywhere but up over the long term. The best part of this market is that current prices allow the investor to realize excellent ROI and a real possibility for appreciation Look 3 to 4 years out to see significant appreciation.
The best buys for the investor are the bank owned properties that are in poor condition and will not qualify for new financing – this limits the number of buyers to the all cash buyer which results in a lower sales price.

Ease of purchase and resale: Unlike apartment units, one can acquire, finance, sell or refinance homes on a one each basis over a period of time. Individual homes also resale much faster than apartment complexes and buyers of owner occupied homes have government assisted/guaranteed financing available to them.

Financing: Typical non owner occupied financing is 20% - 25% cash down.  My best source for direct funding loans has been Chase – Lisa Dipple 408 399-7658 or Wells Fargo – Mayra Ruiz 559 437-1177. For those preferring to work with mortgage brokers talk to Steve Heintz at 559 432-2727 or Sue Sweda 559 225-0500.
See Estimated Cash Flow Work Sheet.

City of Fresno - Online resource for information about the City of Fresno, CA provides access to Mayor's office, City Council, city government documents, and all Fresno city departments.

City of Clovis - Online information about Clovis, CA provides access to Mayor's office, City Council, city government documents, and all departments.

County of Fresno - Fresno County Web site for all county offices and departments.

CVB Virtual Fresno - Tour of some of the beautiful sights from around the city, the Blossom Trail, nearby National Parks and local activities.

California State University, Fresno - Fresno State's sprawling campus draws students from all over the U.S and abroad to the Central Valley.

Fresno Republican Newspaper - Central California's first newspaper was founded in Fresno in 1876 and is still going strong.

Clovis Free Press - Online conservative newspaper for the expanding Clovis community adjacent to Fresno.

The Fresno Bee - McClatchy owned print and online newspaper for Fresno, CA

Tower2000 - Fresno's historic Tower District is the Valley's center for fine dining, cultural arts, theatre, entertainment and night life.

Fresno County Office of Education - FCOE Programs and Services directory, School Districts, Superintendant of Schools, and Board of Education.

Mortgage Tool Shed - Online mortgage tools powered by Fannie Mae. Includes calculators to calculate payments, true cost, affordability and much more Also includes a tool to analyze how likely you are to be approved for a home loan.

Contact Larry Hawkins, Realtor
Office: (559) 438-9425
 FAX: (559) 438-9406
Larry@YourFresnoBroker.com