The Future of Fresno’s Real Estate Sector.

Although Fresno’s real estate leaders are celebrating some successes achieved in the county over the past year, such as completed affordable housing projects and low vacancy rates in the office space and commercial property sectors, they also acknowledge that the real estate sector still presents numerous challenges to be resolved.

Fresno currently has different markets, but it is worth noting that its main resources depend heavily on the real estate industry. For this reason, the administration is developing urgent measures to address the deficit in revenue from current sales taxes, as older buildings increase insurance costs for homebuyers and property owners, and the value of agricultural land is declining. Ambitious projects such as the Southeast Development Area, for example, face feasibility tests.

One of the measures being addressed by the city of Fresno, California, is the slight reduction in sales taxes, which provides a small ray of hope for the recovery of the real estate sector. The administration expresses that for the next fiscal year, it has projections that the sales tax will decrease again, and thus aims to ensure that property tax revenues remain strong.

The current mayor of the city has set important goals to recover the housing sector, such as the construction of 6,100 more affordable homes over the next three years. One of these major projects is the Monarch in Chinatown. This new building complex includes 57 units distributed in studios and one- and two-bedroom apartments. The project, opened in 2022, experienced great demand as its main idea is that future owners allocate around 30% of their monthly income for the loan, without being overwhelmed by rental payments.

As for single-family homes, Terence Roderick Williams, CEO of the Fresno Housing Authority, has stated that the administration is taking a very balanced approach. However, real estate agents affirm that normally when interest rates rise, home prices should fall to compensate; a situation they are not seeing in the real market. Despite this, agents declare that now is a great time for anyone looking to buy a single-family home to do so.

One of the major problems the city of Fresno faces, creating many challenges for new homebuyers, is the high cost of insurance. This is especially true for the acquisition of properties located in areas designated as high-risk for fires and for the purchase of older homes. However, experts declared that this has not caused the market to collapse.

As for the office and commercial space sector, with prices more aligned to buyers’ budgets, experts are more optimistic about this market’s outlook.

In the agricultural market, however, the outlook is more uncertain, and industry leaders warn of difficult times ahead for this sector due to the drop in prices for the county’s most important crops, which significantly impacts the value of agricultural land.

A clear sign of the problems the agricultural market is currently facing is the multiple bankruptcies, foreclosures, and forced sales of various companies in the sector. This situation is not expected to improve during the year. A clear example of this was the company Prima Wawona, which declared bankruptcy, leaving thousands of farmworkers in the Central Valley unemployed.

Looking forward, Fresno’s real estate sector is expected to feature multiple projects on which the administration is already working. One of these plans is to increase the downtown residential population so that more retail businesses are attracted to the area.

Foreclosures available:

Downtown Fresno: 12

Tower District: 8

Northwest Fresno: 15

Southeast Fresno: 10

Harlan Ranch: 5

Copper River: 3

By Elias DaSilva | September 16, 2024.