Jobs, income, mortgage rates.
Those are the factors affecting the levels, or volume, of homes sold in the housing market, a real estate expert said at the 2015 Fresno Housing Market Symposium at Fresno State’s Gazarian Real Estate Center.
The good news is that mortgage rates remain low, at least for now, and the job scene has improved. “Income growth was the last to the party,” said Dean Wehrli, senior vice president at John Burns Real Estate Consultants based in Irvine.
While home prices and rents are skyrocketing in tech areas like San Francisco, San Jose and Seattle, the housing market in Fresno remains stable, Wehrli said. It has even circled back to where it was in the early 2000s.
Wehrli, who is from Sacramento, was the keynote speaker at the annual event which takes a look at housing trends in the Central Valley. A panel discussion was also held with Josh Peterson and Peter Castanos, president and vice president of Wathen Castanos Homes, a Fresno-based homebuilder.
“Fresno is at a low risk point,” Wehrli said during his presentation.
Distressed properties, or foreclosures, were squeezed out of the way and home prices are up although the pace of appreciation has slowed. But there are some challenges on the horizon such as labor shortage, rising land costs and shifting demographics.
Wehrli spent a lot of time talking about changes in society affecting the number of new households created and the types of homes that may be built in the future. People are marrying later in life which delays the homebuying process, Wehrli said.
There are fewer divorces, which is good, but Wehrli joked that it was bad for builders since divorces turn one household into two. Also, the number of single women or women breadwinners has increased affecting the types of homes on the market. Women want low maintenance houses, sometimes attached like a town home and security.
A new direction
Peterson and Castanos shared their company’s journey through the economic downturn as it shifted outside of Fresno and Clovis for the first time to the South Valley in 2009.
Land was affordable, there was job growth and fewer builders, they said.
“If there’s low supply, employment and little competition, you set the stage for something,” Peter Castanos said.
The company sold 20 homes that November, 250 total. Since then, Wathen Castanos has built in Lemoore, Hanford, Tulare and acquired Mangano Homes, a developer of commercial and residential projects in San Luis Obispo and Visalia, on the Central Coast.
“We have the methodology of divide and conquer,” Peterson said.