PRESIDENT'S CORNER #11
Real estate outlook improves
Talk to three different people and you’ll get three different answers regarding the local real estate market. One thing virtually all experts agree on: The long-term prospects for our Valley are GREAT! The short-term picture? Opinions differ. The following is an excerpt from a news story written by Sanford Hax of the Fresno Bee. Bear in mind that the writer’s perspective is Fresno-centric, but much of the information applies equally to our little corner of San Joaquin County:
Low interest rates, a growing population, relatively low prices and an abundance of land will help make the central San Joaquin Valley a desirable real estate market in 2007, a panel of forecasters said Thursday.
Experts representing various real estate segments presented their views to about 600 people at an annual forecast sponsored by the Economic Development Corp. serving Fresno County.
The weakest sector appears to be residential real estate, where the latter half of 2006 brought sharply reduced sales and lower prices.
What 2007 brings remains to be seen. DataQuick Information Systems released figures Thursday that showed sales and median prices of new and existing houses slipping in February from January. But Leonard said real estate agents are reporting more traffic at open houses and that more homes are entering escrow.
Leonard's prediction: a boost in transactions of 6% to 9% this year, with prices staying stable because a large supply of houses for sale will keep a lid on appreciation.
Meanwhile, home builders finally are starting to see some hopeful signs after months of soft sales and excess inventory.
"The bottom of the decline in new-home construction has been reached," said Michael Prandini, president and chief executive of the Building Industry Association of the San Joaquin Valley.
Builders are reporting more people visiting model centers, shrinking supply of unsold houses, lower land prices and interest rates and prices that have stabilized.
The commercial real estate sectors appear to be stronger and continuing with little change from 2006. The repositioning of Rite Aid, Walgreens, Longs and CVS in the highly competitive drugstore wars will continue as they add sites in the Valley, predicted Jack Messina, a senior vice president at Colliers Tingey International.
Target, Orchard Supply Hardware and Lowe's will add stores in the Valley, while more national tenants such as Cabela's, Staples and Dillard's will sniff around, looking for sites, he said.
Office buildings also will continue to be in demand, predicted Brian Decker of Colliers Tingey. Office buildings will be constructed at or near River Park and Palm Bluffs Corporate Center, but the vacancy rate will still remain fairly low compared with competing cities.
Mike Harter of Grubb&Ellis/Pearson Commercial said the number of apartment deals will decline, but rents will climb modestly.
"It's the end of Mr. Toad's Wild Ride," he said of the recent real estate market. "Sanity is being restored."
He said buyers and lenders will be more conservative and added, "Real estate will have to compete for the investment dollar."
My personal observation is that our local residential real estate market appears to be stabilizing, although list prices must be right or Buyers will pass you by. The sheer number of homes on the market means that proper pricing is critical. In other words, welcome to a more “normal” real estate market.
Talk to three different people and you’ll get three different answers regarding the local real estate market. One thing virtually all experts agree on: The long-term prospects for our Valley are GREAT! The short-term picture? Opinions differ. The following is an excerpt from a news story written by Sanford Hax of the Fresno Bee. Bear in mind that the writer’s perspective is Fresno-centric, but much of the information applies equally to our little corner of San Joaquin County:
Low interest rates, a growing population, relatively low prices and an abundance of land will help make the central San Joaquin Valley a desirable real estate market in 2007, a panel of forecasters said Thursday.
Experts representing various real estate segments presented their views to about 600 people at an annual forecast sponsored by the Economic Development Corp. serving Fresno County.
The weakest sector appears to be residential real estate, where the latter half of 2006 brought sharply reduced sales and lower prices.
What 2007 brings remains to be seen. DataQuick Information Systems released figures Thursday that showed sales and median prices of new and existing houses slipping in February from January. But Leonard said real estate agents are reporting more traffic at open houses and that more homes are entering escrow.
Leonard's prediction: a boost in transactions of 6% to 9% this year, with prices staying stable because a large supply of houses for sale will keep a lid on appreciation.
Meanwhile, home builders finally are starting to see some hopeful signs after months of soft sales and excess inventory.
"The bottom of the decline in new-home construction has been reached," said Michael Prandini, president and chief executive of the Building Industry Association of the San Joaquin Valley.
Builders are reporting more people visiting model centers, shrinking supply of unsold houses, lower land prices and interest rates and prices that have stabilized.
The commercial real estate sectors appear to be stronger and continuing with little change from 2006. The repositioning of Rite Aid, Walgreens, Longs and CVS in the highly competitive drugstore wars will continue as they add sites in the Valley, predicted Jack Messina, a senior vice president at Colliers Tingey International.
Target, Orchard Supply Hardware and Lowe's will add stores in the Valley, while more national tenants such as Cabela's, Staples and Dillard's will sniff around, looking for sites, he said.
Office buildings also will continue to be in demand, predicted Brian Decker of Colliers Tingey. Office buildings will be constructed at or near River Park and Palm Bluffs Corporate Center, but the vacancy rate will still remain fairly low compared with competing cities.
Mike Harter of Grubb&Ellis/Pearson Commercial said the number of apartment deals will decline, but rents will climb modestly.
"It's the end of Mr. Toad's Wild Ride," he said of the recent real estate market. "Sanity is being restored."
He said buyers and lenders will be more conservative and added, "Real estate will have to compete for the investment dollar."
My personal observation is that our local residential real estate market appears to be stabilizing, although list prices must be right or Buyers will pass you by. The sheer number of homes on the market means that proper pricing is critical. In other words, welcome to a more “normal” real estate market.
posted by Larry Underhill at 15:33
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