Real estate in Fresno County is strong and expected to continue its steady streak this year, according to a panel of local experts at the 2017 Fresno County Real Estate Forecast.
The industrial sector still leads commercial real estate. Home prices continue to rise at a healthy rate while interest rates remain low. And despite a rash of store closures, retail remains hot with new concepts and “retailtainment” hitting the area. Yes, retailtainment. More on that later.
The real estate forecast was hosted by the Fresno Economic Development Corporation on Wednesday night. Here’s what you need to know:
▪ E-commerce is leading the industrial sector thanks to Fresno’s central geographic location in the state. Vacancy is low at 6 percent. Inventory is scarce leaving buyers and tenants with few options for space, said Ethan Smith, vice president industrial Newmark Grubb Pearson Commercial.
Prediction: The value of quality properties and price for land that can be developed will increase. New speculative construction – buildings built without a buyer or user in mind – and build-to-suite projects will increase. More e-commerce users will come to the Valley.
2. Closures and more closures are hitting the retail scene. Why? “There’s a big Amazon in the room,” joked Rachael Orlando of Retail California referring to the e-commerce giant. Other reasons include lack of brand identity and a washed out concept. The hottest trends now, absorbing large empty spaces, include food halls that are chef driven, provide farm to fork meals and locally source their products. Then there is experiential retail or retailtainment – things you cannot buy online. Think CycleBar, the indoor cycling fitness business; Blown Away hair styling; Riley’s Brew Pub; and the movie theater.
Prediction: Retail sales will increase. Rents will stabilize and vacancies will be absorbed with new concepts. New construction will increase.
3. The median home price in Fresno last year hit $240,000. In 2006, it was $289,000. Home price appreciation spiked by nearly 39 percent in 2013 leading many to believe another housing bubble was ahead. But the annual price appreciation slowed to about 7 and 8 percent since 2015 which is “considered healthy and long-term sustainable,” said Patrick Prince, the 2016 board president of the Fresno Association of Realtors.
Prediction: Strong buyer demand will keep housing inventory low. Interest rates will remain low. Appreciation rate will slow.