With a central location in California, specifically in the San Joaquin Valley, Fresno is an attractive destination for many people. The city offers affordable living, access to many activities and important tourist spots, and around 300 days of sunshine each year.
Additionally, the region is known for its fertile soil and a wide variety of crops, giving residents access to fresh, locally grown produce throughout the year.
Fresno also has a diverse population, including people of African American, European, Asian, and Hispanic descent. As a result, the city offers a variety of cuisines for foodies who want to explore different cultures.
However, there are still many questions that landlords and property managers should answer before investing in the Fresno real estate market.
Is the Fresno housing market strong? Will it crash soon? Read on and find all the information you need to make a wise real estate purchase.
Fresno Housing Market Trends
According to Redfin's latest reports, Fresno's median home price rose at the end of this year's first quarter, as did the number of units sold.
March 2023 figures show an increase in sales since January of this year, giving a positive outlook on the market despite recent fluctuations.
Fresno's Median Listing Home Price
In March of this year, the median price for a home in Fresno rose about 2.7% compared to March 2022, reaching $380,000. Approximately, the asking price for a property in this city is $233 per square foot.
While the Fresno housing market has seen major changes, these figures also show a steady increase in home prices since January of last year. The median listing price fell to $350,000 back then.
According to the latest data published by Realtor.com, there are 1,193 houses for sale across Fresno's 23 neighborhoods. Home prices range from $55,000 to as high as $9.5 million.
Median Days on the Market
Redfin's latest reports also show that the Fresno housing market is still somewhat competitive, as homes sold in just 24 days in March 2023.
During the same period last year, homes sold in just eight days, on average. Although the latest median days on the market is considerably higher, it's still low compared to other cities.
In addition, the median days on the market reported in March is 23 days lower than in January of this year. However, hot homes can sell in just seven days for about 2% above the list price.
In Fresno, there were also 334 homes sold by this year's first quarter, down from 471 in March 2022. It accounts for a 29.1% year-over-year drop.
However, March 2023 figures show that the Fresno housing market has started to recover. In January of this year, the number of homes sold dropped to 225, which means that over 100 more homes have been listed and purchased in the past two months.
According to Redfin's reports, around 40.7% of homes in Fresno sold above the list price in March 2023, which accounts for a 23.4% drop year over year.
However, the number of houses that sell above the list price has risen since January of this year. Back then, only 25.8% of real estate properties received multiple offers from buyers willing to pay more.
Factors Affecting the Fresno Housing Market
What has caused the median home sold price for an average home in Fresno to rise? Why have the city's home values fluctuated over the past few months?
As in other cities, different factors affect the Fresno housing market, including the following:
The economy has a major impact on the local real estate market. In Fresno, rents and home sales are often influenced by economic activity, as the city is considered California's agricultural heartland.
However, Fresno offers much more than farming and food processing. Since the city is considered the regional services hub, there are many job opportunities in the educational and medical areas.
Fresno is also home to several colleges and educational institutes, including 213 public schools that received a "good" or higher rating by GreatSchools, and 38 private and charter schools.
In addition to the economy, the policies applied by the local government can also affect the housing market. Tax credits, deductions, and subsidies are some of the things investors and homebuyers should consider.
Mortgage Interest Rates
Both in Fresno and other cities, interest rates also impact the local housing market. Overall, higher interest rates make the demand for homes fall.
According to the latest reports, mortgage interest has risen sharply across the country, reaching 6.79% and 6.16% for 30-year fixed-rate loans and 15-year fixed-rate loans in May, respectively.
The composition of the city's population also influences the housing market. Experts often consider people's income, age, and migration patterns to understand real estate trends.
Redfin's reports showed that around 0.38% of homebuyers searched to move into Fresno from outside metros, especially San Francisco, Los Angeles, and Sacramento.
In addition, around 72% of Fresno homebuyers expect to stay within the metropolitan area.
Will the Fresno Real Estate Market Crash Soon?
Many homebuyers and real estate investors are concerned about a potential housing market crash. However, experts only predict slightly negative trends and a slowdown, insisting it won't be huge.
Here are a few signs that the Fresno real estate market is still solid and unlikely to crash:
- High Housing Demand: Although the number of homes sold has fallen considerably compared to last year's figures, it's higher than in January of this year. Additionally, Fresno continues to be attractive to many groups, including migrants and students.
- Low Housing Supply: The number of homes for sale increased, but housing inventory is still low. Overall, a real estate market is likely to crash when supply is too high, but there are not enough buyers.
- Stricter Lending Requirements: Now, obtaining a loan to buy a property is more difficult than 15 years ago, as most lenders have set stricter criteria.
- Low Supply of Newly Constructed Homes: In Fresno, there aren't many newly constructed homes, so inventory is expected to remain low.
- Fewer Foreclosures: As homeowners now have stronger personal balance sheets and more equity in their houses, the local foreclosure rate has fallen.
Fresno Housing Market Statistics
Whether you plan to buy a home in Fresno or are considering starting your real estate business in this city, here are other important statistics to consider:
- The median home sold price for single-family homes in the Central Valley region is $449,000, which is 5.6% higher than in January of this year but 3.4% lower than in February of last year.
- In the Central Valley region, sales have increased significantly since January 2023, but the numbers have fallen by 28.6% year over year.
- Rents in Fresno are between $425 and $5,000 per month.
- Fresno's sale-to-list price was 99.4% for all home types in March 2023, which is 2.9% lower than last year.
- About 0.38% of the nation's homebuyers searched to move into Fresno.
- Many experts estimate that Fresno's median listing home price will be over $400,000 in the coming months.
- The local unemployment rate is 7%, which is several points higher than the state and national average.
- Metropolitan Fresno, comprising Fresno County and Madera County, is the third-largest metropolitan region in Northern California.
Housing Market Predictions
If you want to buy a home in Fresno, California, you should also consider experts' predictions. These are the most important:
Mortgage Interest Rates Will Be Higher
Analysts believe that geopolitical tensions, a potential recession, and rising inflation will cause mortgage rates to be higher. Most expect them to reach between 7.70% and 8.50% this year.
Home Prices Will Be Lower
Many experts also predict that home prices in Fresno will drop by at least 5-10% because of higher interest rates.
Home Affordability Will Fall
Higher mortgage payments will also make properties more expensive or look less affordable.
The Housing Inventory Will Remain Low
In addition, many analysts think that the housing inventory in Fresno will remain low throughout this year since people don't want to get loans with interest rates of 7%.
Fresno Housing Market Forecast
Investors should also consider the Fresno housing market forecast for 2023-2024 before buying a home in this city.
While there have been fluctuations, the Fresno housing market has seen steady growth in recent months, with home prices rising sharply in this year's first quarter.
Also, the median days on the market is low, which means that the local real estate market is still competitive and active. The sale-to-list ratio also shows that homes have sold just below the listing price, which is a positive sign.
As a result, experts predict a negative trend this month. However, most believe that the housing market will show signs of improvement by this year's last quarter.
The Final Verdict
Though often overshadowed by San Francisco, Los Angeles, and San Jose, Fresno remains attractive and has a solid housing market.
The latest reports show changes and major fluctuations, but experts expect the city's real estate market to remain competitive for the next few months, reaching a significant improvement level in 2024.
Frequently Asked Questions
Is Fresno a Buyer's Market?
Yes, it is! Currently, Fresno is a buyer's market, as there is more supply than demand for real estate properties, according to the latest figures.
Is It a Good Idea to Buy a Home in Fresno?
While there are many opportunities for buyers, as they have negotiation power in their hands, the Fresno housing market is still changing. Therefore, you must analyze several factors to determine if buying a property in this city is a good investment opportunity.