Housing Prices and Economy

September 19, 2008 12:54:04 AM PDT
The Central Valley is not immune from the problems on Wall Street, but may have some protection."We are doing probably better in Fresno than the average city in America." That's how Fresno State University Economist Bill Rice sees it.

Rice says agriculture, a 6 billion dollar a year business in Fresno County alone provides an economic cushion, because unlike stocks, food is not something people can do without. He says," The tomatoes and the fruits and other kinds of stuff, people are going to continue to buy that stuff because that's what they need."

Housing is also something people still need, and prices in the Fresno area have dropped low enough to cause a surge in sales. Don Scordino is a realtor and President of the Fresno Association of Realtors. He says," Sales are actually way up for the same period of time last summer we had 32 per cent more buyers than last summer that have actually closed escrow."

Scordino says over 5 hundred houses a month have sold over each the last 3 months. The longest run in 3 years. But, that's because prices are down, thanks to all the foreclosures.

Scordino nots,"Most of the opportunity is affordability. The prices at a point where buyers can afford it and of course the interest rates have taken another drop, which makes it more affordable."

One boost to the real estate market is the return of investors. While they are blamed for part of the run up in prices, that lead to the collapse in prices, that collapse has brought some new opportunities, and Bill Rice says those Bay Area investors are back, because Fresno real estate is once again a bargain.

But investors have a much harder time getting financing today than regular homebuyers, who are now finding 30 year fixed rate mortgages backed by the FHA are the most popular way to buy.

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