Newcomers help push Fresno house, apartment prices higher. Where are they coming from?
Fresno is a hot market for both would-be home buyers and apartment renters seeking refuge from more expensive areas of California.
Out-of-towners represented almost 43% of people searching for homes in the Fresno market on real estate platform Redfin, and almost 42% of renters searching for apartments on ApartmentList.com.
Recent migration analyses by Redfin and ApartmentList.com show that people from the cost-inflamed San Francisco Bay Area represent a large portion of the out-of-towners who are using the two technology platforms to search for homes or apartments in the Fresno metropolitan area.
In Fresno County, the median selling price of an existing single-family home in March 2022 was $415,000, according to the California Association of Realtors. That’s almost 19% higher than it was a year earlier — but it’s also less than one-third of the price in the Bay Area, where the median price topped $1.4 million.
Redfin’s data reveals that of out-of-town users searching for a home in Fresno, 55% would be migrating from the Bay Area. The Los Angeles metro area, where the median home-selling price in March was almost double Fresno’s, represented 17% of searches for Fresno as a buying destination.
Other California markets represented among the Fresno house-hunters include Sacramento, 7.8%; Chico, 2%; San Diego, 1.8%; Salinas, 1.4%; San Luis Obispo, 1.2%; Bakersfield, 0.7%; and Santa Maria, 0.5%.
Seattle, Washington, was the leader among out-of-state buyers searching in the Fresno area on Redfin, at 1.7%, followed by Portland, Oregon, at 0.6%. Smaller percentages were reported from as far as Dallas and Houston, Texas; Washngton, D.C.; Las Vegas, Nevada; New York; Phoenix, Arizona; and Denver, Colorado.
Housing prices fuel interest in Fresno homes, apartments
The reports come shortly after California’s latest population estimates showed that most of the state’s largest cities shrank in population during 2021. Fresno and San Diego were alone in the top five largest cities to show a population increase last year.
One local Realtor said he believes housing costs are a major reason behind the population shifts away from cities like Los Angeles, San Jose and San Francisco.
Brian Domingos Jr., owner/broker of Premier Valley Realty in Fresno and president-elect of the Fresno Association of Realtors, told The Fresno Bee last week that the pandemic-induced ability or necessity for more people to work from home has helped fuel migration from the expensive markets to cities like Fresno that, by comparison, are more affordable.
“There was a larger expectation that more people would move here because of their ability to work remotely, especially in the IT (information technology) industry, and there’s been truth to that,” Domingos said. He recounted getting a phone call last week from a would-be home-buyer from the Bay Area who wants to find a house in Fresno to be closer to her mother, “and she cannot even touch a home in the Bay Area because of the prices.”
That dynamic is not only helping to drive house prices up in Fresno — the median price for a house in Fresno County was almost 19% higher in March 2022 than it was a year earlier, the California Association of Realtors reported — but what homes do land on the market are being snapped up quickly, and often for more than the asking price.
“We’re at about two weeks average time on the market” for houses listed for sale in the Fresno area, Domingos said. He added that recent data shows “about 70% of listings were selling for more than the listed price.”
San Francisco had the largest net potential outflow of home searchers in the first quarter of 2022 in the U.S. — almost 53,000 Redfin users searching seriously for homes outside their market, compared to about 40,700 in the first quarter of 2021. Los Angeles had the second highest number, more than 37,000.
“Skyrocketing home prices and rising mortgage rates have made relocating to a more affordable area the only viable option for some prospective homebuyers,” Redfin data journalist Dana Anderson reported recently.
Out-of-towners scour ApartmentList for rentals
It’s not only house hunters who are fueling a rise in Fresno housing costs. Renters looking for more affordable places are also sniffing around the Fresno market, according to data released this week by ApartmentList.
Of the 41.6% of out-of-towners using the ApartmentList website to search for rentals in Fresno, the largest proportion was from Sacramento, followed by San Francisco, San Jose and Los Angeles. Each of those metro markets have apartments that are far more expensive than Fresno’s April median rent of $1,367:
- Sacramento, with 31% of the out-of-town searchers for Fresno apartments, had a median rent in April of $1,651.
- San Francisco, 17.5% of out-of-town searchers, had a median rent in April of $2,204.
- San Jose, 6.1% of out-of-town searchers, had a median rent in April of $2,372.
- Los Angeles, 5.9% of out-of-town searchers, had a median rent in April of $1,874.
“Over the course of the past year, rent increases have hit virtually all corners of the nation,” the ApartmentList research team reported Tuesday. “Nationally, the median rent price is up 16 percent year-over-year, and in some cities rent growth is more than double that. Renters who are apartment hunting now must contend with this affordability crunch as well as a competitive rental market with historically low vacancy rates.”
This story was originally published May 11, 2022 at 7:00 AM.
