Jumping off the charts with 113.4 percent growth, Fresno comes in 52.2 percent higher than the second largest growth market, Naples, Fla. With the number of permits increasing from a mere 261 to 557, Fresno is still a small market for new housing, but growing rapidly.
So what’s fueling this steep interest in new construction?
Employment has been on the rise since 2011, where a small 0.2 percent growth has yielded as much as 4.4 percent growth in 2013. According to Forbes, job growth in Fresno will continue its rise by as much as 3.1 percent in the next few years. This positive employment trend creates the need for more new housing and prompts fewer vacancies in existing housing, also driving up the need for construction.
Historically an ag-based market, Fresno is rapidly broadening its economy in what the Brookings Institute calls advanced industries, or those characterized by research, development, science, technology, engineering and math. Many of the major employers in the Fresno area fall under the healthcare industry, including Saint Agnes Medical Center, Kaiser Permanente and the Children’s Hospital of Central California. In 2013, Fresno ranked 95th for the number of jobs in advanced industries in the 100 largest metro areas, boasting nearly 11,500 jobs.
Favorable Market Conditions
Housing affordability in Fresno has remained stable, and continually outperforms the rest of the state. A little more than 50 percent of Fresno’s population can afford to buy a median-priced home ($212,200) on a salary of roughly $42,000 a year, says the Fresno Bee. Statewide, California’s affordability weighs in at just 34 percent and dips lower still for markets like San Francisco, where only 12 percent of people can afford to buy a home. Interest rates have also remained stable and at a low rate, incentivizing buyers to jump into the current housing market.
The large presence of Millennials in Fresno (or those born between 1980 and the early 2000s ) points to a robust future for the city, where the likelihood of household formation and economic growth are high. In 2014, the financial education site NerdWallet named Clovis, Calif. (Fresno’s immediate neighbor, a mere 15 minutes away), as the best city for young families in California, pointing to the quality of public education in the area as well as affordability and promising growth.
Looking to buy a home in Fresno? Now's the time to take advantage of this young market.