Central Valley Housing Bubble Ready to Burst?

Central Valley Housing Bubble Ready to Burst?

March 1, 2006 - The Valley housing boom is over, with home prices in some neighborhoods dropping $50,000 in just the past two months.
The median price of an existing home in the Central Valley in January of this year was $347,000. That's a 13% jump from the same time last year, when the average price was $307,000.

Valley home prices have been going up so fast, your home is still worth more than it was a year ago.

But when Action News broke down the numbers, we found that in the past couple months, the bubble appears to be bursting. To realtors, it's a market adjustment. But to some analysts, it's a full-on correction.

Local housing prices have come tumbling down over the last two months, erasing months of drastic increases.

Just two months ago, the median sale price for homes in Clovis' 93611 zip code was $439,000. But in just 60 days, those homes plummeted $51,000, to $388,000.

Over the same time frame, Fresno homes were unchanged, while homes in Merced lost a little more than $4,000 in value.

The correction hurts worst for people who flip homes, buying them and selling them again within a matter of months.

"You can drive through any brand new subdivision. You will see just as many for sale signs and for rent signs as you see people living in the homes," said Joan Jolly, from the Fresno Association of Realtors.

Realtors say the adjustment is great news for buyers, who are all of the sudden paying a lot less for the same homes.

But even though homes are staying on the market longer now, people are still going to extreme measures to get their dream homes.

Kasey Krouskup stood in line for two days to buy a new half-million dollar house in a Copper River development, even though she knows the market is a little soft at the moment, "It's not about the market now. It's about finding a piece of real estate we'd like to stay in for a while."

Sanger homes are in the top 10 in the entire state for appreciation over the last year. They're up 54%.

But for the last two months, they've been on the way down too, by almost $17,000.