Thursday, June 15, 2006

'Chico is a Special Place'

After reading one too many real estate articles over the past year, I've come to the conclusion that everyplace is special and land is scarce everywhere. From the Chico Enterprise Record:

Despite a national study that concluded Chico homes are "extremely overvalued," members of the real estate industry here see a buyers' market. A valuation analysis released Monday by National City Corp. and Global Insight found that homes in Chico are priced nearly 61 percent higher than they should be...

Brewster Beattie, a Realtor with Coldwell Banker in Chico, said calling the market overvalued is subjective. People still gladly move up here from more expensive areas of the state, he said. "I think it's all a little bit relative," he said. Beattie questioned income levels used in the study.

"That's skewed down, I think, because of the student situation," he said, referring to Chico State University. "That's someone in New Jersey that doesn't know the Chico real state market." Even so, the high prices have plateaued, Beattie said, and there is an increasing number of homes on the market. In May 2005, there were 163 homes up for sale in Chico. Now, there are 492. "I think right now the inventory is escalated because people are putting homes on the market too high," he said. "They're not selling. It has turned into a buyers' market."

Carlee Shannon of Preferred Agents Real Estate said the market in Orland is showing a similar trend. There are now more than 90 homes up for sale, whereas a year ago there were only 20 to 25. "I think it's because our prices are too high. I believe it's softening and becoming a buyers' market," Shannon said. "There are so few buyers at this time and so many listings out there, so it influences the seller to be motivated. We're seeing price reductions..."

Steve Bertagna, a Chico city councilor and Chico Valley Mortgage loan specialist, said studies of home values often don't take into account quality of life issues, such as climate and recreational activities that make an area attractive to prospective residents. "Chico is a special place and people know about it," he said. "These things directly or indirectly contribute to home values." He cited a scarcity of land available for development as a cause of high prices here.


rocklin renter said...

Those kooky analysts using their "black magic" factual data and numbers to come up with their analysis.

Witches I tell you! What do they know?!?!

I need to go get me a cup of that Realtor kool-aid. Sounds like it's a better hallucinogen than some illegal drugs.

Anyhow, Chico is a "special" place. Yeah, it's "special" alright.

tom stone said...

only 62% overpriced!...gosh i'll put that in my craigs'list ad...and mention the velveeta factory,and the good will want a lot of COLD beer in chico in the summer...and you can always rent your place to students if it doesn't sell,is chico state still the best party school in the u.s.?

Happy in SF said...

Chico is a hole, Chico state is known nationally as having one of the drunkest student bodies. I think that has something to do with the fact that Chico is a hole.

peterbob said...

People need to be reminded of a little psychology: humans will "create" rationalizations in order to protect themselves from uncomfortable thoughts, such as the thought that their house will lose 50% of its value in the next few years.

Next time someone tells you how "special" their locality is, ask them what exactly made their city MORE special in 2002-2003 that caused demand to skyrocket? They'll offer some bullshit answer, but they won't have anything better than this: MOST housing markets have gotten frothy due to country-wide reductions in lending standards. The frothiness is universal and NOT a reflection of any particular area's desireability.

norcal ray said...

Now if you rent the house to some college girls it might make the high prices worth it. Other than that, the numbers don't hold up.

Anonymous said...

Chico is a great place. It's a nice town, the beer is cold and because of the university it's got at least some culture. At least a hell of a lot more than some place like Rocklin or Elk Grove. And you can rent a home that's on the market for mid 300k for a hair over a grand a month. That is, if you can find a rental between the speculators trying to jettison horribly overvalued homes in new developments.

rocklin renter said...

Rocklin is a suburb...

Chico is the biggest town for many miles.

Why are you comparing these two?

Oh, and BTW, Rocklin doesn't need culture. We can go downtown for that. What it does have is a great smaller town feel, excellent parks, a very well respected university, and one of the best community colleges in the state.

Your little "hair over a grand" argument isn't all that valid either seeing as if you find a home currently valued at 300k, the rent would be just "a hair over" a grand.

Zillow has the place I am in at around 385. Our rent is 1300. I am content with that seeing as I am actually close to things I want to do - not hours away!

If given the choice (all things being equal) you would choose Chico over Rocklin to live... well, I pity you.

Elk Grove on the other hand... Well it reminds me way too much of where I used to live - Vegas. Too much new development, flat as a pancake, and no real charisma. IMO.