The Central Valley is absolutely booming with new developments. According to Zillow, between the four biggest cities in The Valley, Fresno, Clovis, Madera, and Visalia, there are over 50 new communities being built! These new developments play a major factor in buying a new home or selling your existing one, so it is not only important to know all the logistics that go into developing a new community but also what these communities mean to anyone interested in learning more about real estate. In an earlier blog I talked about the role that analytics plays in the real estate industry along with the importance of these analytics for anyone interested in real estate. In this post we will build off that knowledge and dive into how these new communities affect your current home value, its future value, and what this means for the market as a whole.
These new communities are a great example of how analytics has shaped the future of real estate and will continue to have a tremendous impact on the industry. For example, “homes […] increased in value by 22%” (1) while also being part of an industry that “contributed $990B to the nation’s economy last year”. (1) Which means that while home values were increasing, real estate still made up a major portion of the United States economy and continues to trend in a positive direction. These factors play a huge part in the way that new communities affect the existing local economy while also generating new growth for homebuyers and retaining value for current homeowners. While this explosive growth is great for a current homeowner, it also highlights the necessity for a top-notch realtor that can secure the best value for you. One of the most overlooked aspects of selling a home is what its future value is within the market and new communities play a major role in deciding that.
Fresno is known as being the largest city in the Central Valley with a population over 530,000 people, however, the entire county has a population of over 1,000,000 people. There are a few other areas in The Valley that are experiencing a hefty amount of growth and expansion. Clovis, Visalia, and Madera are all also rapidly expanding areas, with over 40 new communities being built in 2020. These three cities make up a huge amount of growth to both the local economy and the housing market. This is great news for existing homeowners that are looking to stay in their home while also retaining its value. According to Science Direct “New construction is generally expected to create positive externalities.” which is important to consider when looking at not only the current market value of your property but the future value as well.
On the home buying side this amount of growth is really positive news. “In June, the average American home listing price hit a high of $316,000, according to Realtor.com’s Housing Trend Report.” (2) However, “It was only 18 months ago that the number of homes for sale hit its lowest level in recorded history and sparked the fiercest competition among buyers we’ve ever seen. If the trend we’re seeing continues, overall inventory could near record lows by early next year,” (2) Realtor.com Chief Economist Danielle Hale said but “Home construction activity, however, is poised to exceed what experts had projected.” (3) This is great news for people that are looking to secure a good deal on a home since according to moving.com buying in new construction is “less stress and less money spent while everything is still new. In addition, most builders include a range of warranties with their homes, which may include a short-term full structure warranty and a longer-term exterior warranty. It’s a big financial benefit, and a nice relief in the years following such a major purchase.” However, one of the most overlooked aspects of buying a new community is the necessity for a real estate agent. Most people don’t understand the important role that a real estate agent can play in the negotiation process of buying a new construction home.
Madera & Visalia Communities
There are a ton of new communities being built in The Central Valley. These new communities coming in have been shown to create a positive impact on the existing market by boosting value to current homeowners while also providing beneficial deals for people interested in buying a home or investing in real estate. Which means it is beneficial for both the current homeowner and homebuyer to be as educated as possible on new developments coming to their area in order to secure the best deal on the market.
Merrill, T. (2020, February 11). The Residential Redeveloper Effect: 7 Positive Ways The Impact Communities. Retrieved February 27, 2020, from https://www.fortunebuilders.com/the-residential-redeveloper-effect-7-positive-ways-the-impact-communities/
Alcynna, L. (2019, September 20). Housing supply and buyer demand mismatch is pushing buyers out of the market. Retrieved February 27, 2020, from https://www.housingwire.com/articles/49512-housing-supply-and-buyer-demand-mismatch-is-pushing-buyers-out-of-the-market/
Mueller, L. (2018, April 12). The Pros and Cons of Buying New Construction. Retrieved February 27, 2020, from https://www.moving.com/tips/pros-cons-buying-new-construction/
Passy, J. (2020, January 21). Will 2020 be a good year to buy a home? Here's what the experts say. Retrieved February 27, 2020, from https://www.marketwatch.com/story/will-2020-be-a-good-time-to-buy-a-house-heres-what-the-experts-say-2019-12-18