Friday, March 03, 2006

Central Valley "Bubble Appears to be Bursting"

Just a few days ago, I wondered whether the Central Valley's round soapy things were poised to pop. Well, a Fresno television station seems to think the bursting is already underway.

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.

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