Those wanting to buy a home in the Turlock area may be looking for quite a while and then competing with many other potential buyers as the local housing market remains limited. A lack of inventory, and qualified buyers, is a trend not only locally but also statewide.
Long-time homeowners are not moving as often as they have in the past, according to Geoff McIntosh, president of the California Association of Realtors. McIntosh credits this lack of real estate mobility primarily due to low rates on their current mortgages, low property taxes and no place to go.
He recently addressed the Central Valley Association of Realtors during its annual member luncheon to inform area Realtors on local market trends and update them on state-wide legislation.
According to McIntosh, the Housing Affordability Index of Traditional Buyers put out by CAR shows that only 31 percent of California households can afford to purchase a median-priced home, compared to 58 percent nationwide.
“Homeowners are not moving as often, staying in their homes for 10 years or longer, because right now there isn’t somewhere affordable for them to go,” McIntosh said, referring to the low new-home construction market.
Although Bay Area cities have seen an increase in new home construction, new build activity is spotted up and down the Central Valley.
“Families looking to move up or downsize to a newer home have limited options,” said CVAR President Kris Klair. “Despite a healthy economy we’re just not seeing as much new-build construction as we’d like.”
Median-priced, resale homes fly off the shelves as soon as they hit the active market, Klair added.
According to Debbie Whitmore, deputy director of Development Services/Planning most of the single-family development in Turlock is being constructed on infill lots, like the Classics and Monte Verde subdivisions.
The Classics Subdivision by Fitzpatrick homes near Johnson and Tuolumne is a 20-unit, single-family subdivision that is actively moving forward to construction.
Florsheim Homes expects to start construction later this year or early next year on their 107-unit Monte Verde single-family subdivision at Countryside and Tuolumne.
Despite these upcoming developments, home construction is down in Turlock.
So far in 2017, the City has issued 17 permits for single-family homes, based upon the latest report by the Building and Safety Division. Last year, the City issued 45 building permits for single-family homes.
The highest level of single-family permit activity for Turlock occurred in 2003, when the City issued 873 permits for single-family homes. During the housing boom between 1998 and 2006 (prior to the Great Recession), the Turlock averaged about 550 single-family units per year, according to Whitmore. Housing production fell rapidly during the years following the recession to a low of 22 units in 2012.
California, like much of the country, saw a drop in closings in June because interested buyers are being tripped up by a challenging supply of homes and price growth that’s straining their budgets, National Association of Realtors Chief Economist Lawrence Yun reported last month.
McIntosh also shared that software developers ($123,900), registered nurses ($101,260), computer programmers ($92,170) and law enforcement personnel ($93,550) are among the highest paid wage earners that are able to afford a home in California. According to Bureau of Labor statistics, the minimum income required to buy a home in California is $96,790.