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How is The Chico Real Estate Market 2019?
If you’re keen to invest in the Chico real estate market in 2019 and buy before prices become out of reach, you must read till the end. Chico, California is a modest town in northern California. The city isn’t nearly as famous as San Francisco, but the area has a number of points in its favor.
We’re not going to cite wonderful civic events as a reason to invest in an area, because these things attract tourists, not residents. Instead, we’ll address the strong fundamentals girding the Chico real estate market. Chico, California is almost half way between Sacramento, California and Redding, California.
Redding is best known for Shasta Lake and the surrounding national forest, though Chico is close to a number of national and state parks as well. Chico is the biggest city in Butte County, California. Chico is home to almost 100,000 people.
This is roughly 25,000 more people than lived here in 2010. The broader Chico housing market is more than 200,000 people when you take surrounding small towns into account.
That makes the Chico area the fourteenth largest metro area in the state. Is Chico going to be one of the hottest real estate markets for investors in 2019 & 2020? Let’s take a deep look at the latest Chico housing market trends to come to a conclusion.
Chico Real Estate Market Forecasts 2019 & 2020
The real estate data from Zillow shows that the median home value in Chico is $373,700. Chico home values have gone up 13.9% over the past year and their Chico real estate market prediction is that the prices will rise 8.4% within the next year. The median list price per square foot in Chico is $253, which is higher than the Chico Metro average of $204. The median price of homes currently listed in Chico is $385,000.
Here is the Chico, CA real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 8.4% till July 2020.
Chico Housing Market Forecast 2019 – 2021
The Chico housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The Accuracy of the Trend Prediction for Chico is 84%. Accordingly, LittleBigHomes.com estimates that the probability for rising house prices in Chico, CA is 84% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Chico, California Real Estate Market Forecast.
Chico Real Estate Market Trends
On Trulia, the median sales price in Chico is $380,000. Homes are selling for about $248/sqft. At present, Trulia has 389 resale and new homes for sale in Chico, CA, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
As per the real estate company named Redfin, the Chico housing market is very competitive. The average sale price of a home in Chico was $360K last month, up 7.5% since last year. The average sale price per square foot in Chico is $245, up 10.9% since last year.
Many homes get multiple offers, some with waived contingencies. Homes in the Chico housing market sell for around list price and go pending in around 16 days. Hot homes for sale in Chico, CA can sell for about 2% above list price and go pending in around 7 days.
The asking price of homes for sale in Chico has increased 13.6% since August last year, while the number of homes for sale has decreased 5.5%. There are currently 353 homes for sale in Chico on Redfin at a median listing price of $399K. In the past month, 149 homes have been sold in Chico.
There are 567 homes for sale in Chico, CA on Realtor.com. 52 of which were newly listed within the last week. Additionally, there are 40 rentals, with a range of $495 to $2.4K per month. As per Realtor.com statistics, in July 2019, the housing market in Chico, CA was a seller’s market, which means there were roughly more buyers than there were active homes for sale.
In July 2019, the median list price of homes in Chico, CA was $399K, trending up 17.2% year-over-year. The median listing price per square foot was $249. The median sale price was $386K. On average, homes in Chico, CA sell after 48 days on the market. The trend for median days on market in Chico, CA has gone up since last month, and slightly down since last year.
The median list price in Chico, CA is $419,000 on Movoto.com. The median list price in Chico was less than 1% change from August to September. Chico’s home resale inventories is 231, which increased 0 percent since August 2019. The median list price per square foot in Chico is $247. August 2019 was $246. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in September.
Chico, CA Single Family And Multi-Family Homes
Following the real estate market decline in 2007 in the U.S., single family rental homes became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate.
Single family rental properties have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
As per the real estate company called Neigborhoodscout.com, the median house price in Chico, CA is $345,430, which indicates that home prices in Chico are well above the national average for all cities and towns in the United States. Single-family detached homes are the single most common housing type in Chico, accounting for 51.61% of the city’s housing units.
Three and four bedroom single-family detached homes are the most common housing units in Chico. Other types of housing that are prevalent in Chico include large apartment complexes, duplexes, homes converted to apartments and a few row houses. The city has a mixture of owners and renters, with 42.77% owning and 57.23% renting.
Currently, there are 253 single family homes for sale in Chico, CA on Zillow. Additionally, there are 35 single family homes for rent in Chico, CA. Under potential listings, there are about 1 Foreclosed and 18 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Chico, CA Foreclosures And Bank Owned Homes 2019
As per the Chico foreclosure data by Zillow, the percent of delinquent mortgages in Chico is 0.3%, which is lower than the national value of 1.1%.
With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth.
The percent of Chico homeowners underwater on their mortgage is 4.6%, which is lower than Chico Metro at 5.8%.
| Foreclosures in Chico | 24 |
| Homes for Sale in Chico | 266 (RealtyTrac) |
| Recently Sold | 930 |
| Median List Price | $395,000 (1% ⇑ vs Jul 2018) |
There are currently 24 properties in Chico, CA that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 266. In August 2019, the number of properties that received a foreclosure filing in Chico, CA was 0% higher than the previous month and 0% higher than the same time last year.
Best Neighborhoods to Invest in Chico Rentals
If you are looking to invest in the Chico rentals, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your Chico rental real estate and you should be able flip it for a lump sum profit.
When looking to invest in Chico real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an Chico investment property should be low. The neighborhoods in Chico must be safe to live in and should have a low crime rate.
The neighborhoods should be close to basic amenities, public services and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. There are 22 elementary schools, 16 middle schools, 14 high schools and 14 private & charter schools.
Some of the best neighborhoods in or around Chico, California are The Avenues, Doe Mill, East Streets, Downtown Chico, California Park, Southwest Chico, Mulberry Valley, Mansion Park, West Avenues-North Campus, South Chico Downtown, Barber, Nob Hill, California State University-Chico, Bidwell Manor, Chico Vecino, Heritage Oaks and Little Chico Creek Estates.
Canyon Oaks has a median listing price of $746.5K, making it the most expensive neighborhood. Southwest Chico is the most affordable neighborhood in Chico, with a median listing price of $299,000.
Here are the best neighborhoods to invest in Chico rentals because they have the highest appreciation rates (List by Neigborhoodscout.com).
1 |
California State U-Chico / Arcadian Ave |
2 |
Vallombrosa Ave / Madrone Ave |
3 |
Barber |
4 |
Bruce Rd / Dominic Dr |
5 |
Lakewest Dr / Centennial Ave |
6 |
City Center |
7 |
Nord Hwy / Esplanade |
8 |
Nord |
9 |
Eaton Rd / Hicks Ln |
10 |
Marigold Ave / Arch Way |
Is Chico a Good Place to Invest in Real Estate?
Now that you know where Chico is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Should you invest in Chico rental real estate?
Many real estate investors have asked themselves if buying a rental property in Chico is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Chico housing market 2019 forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for Chico but we have collected ten evidence based positive things for those who are keen to invest in the Chico rentals in 2019.
Investing in Chico rentals will fetch you good returns in the long term as the home prices in Chico have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Chico real estate market which can help investors who are keen to buy an investment property in this city.
1. The Area’s Rapid Growth
One reason to consider Chico real estate investment is the area’s rapid growth. It has seen 30 percent population growth over the past ten years. In fact, the city says that the Chico housing market already contains more than 110,000 people, twenty percent more than the state’s estimate of roughly 90,000 people.
This makes the Chico real estate market the largest one north of Sacramento. This was partially due to many people moving here from Paradise, California after that city was destroyed in a 2018 fire.
However, others choose to move to the area for more important reasons, ones that influence the Chico housing market over the long-term.
2. The Impact of Geography
Chico sits at the intersection of the Cascade Range and Sierra Nevada Range. This means the city has foothills to the north, east and south. You can build in the foothills, but the cost is much higher than on the Sacramento Valley floor.
The wildfires that have ravaged the foothills for years also deter construction in those areas. Conversely, large areas of flat land are already off limits to development. The biggest such example is Bidwell Park, the third largest urban park in California and in the top 50 largest in the U.S.
3. The Recent Redevelopment
The Doe Mill residential neighborhood in Chico is an example of new urbanist development. It is a modern, walkable community of the style popular with Millennials who want to live car-free. There are several newer neighborhoods built to suit families, and they’re attracting people fleeing Sacramento or over-priced cities to the south.
4. The Relatively Strong Job Market
The Chico job market has unemployment rates in line with the national average. The area’s job growth, though, is higher than the national average. The Chico area has seen 2 percent or higher annual job growth while the national average is closer to 1.5 percent.
Another point in favor of the Chico real estate market is the diversified local economy. The city is the regional services hub. This is where the hospitals and colleges serving the entire geographic region are based.
This creates more high paying jobs and general service jobs than the tourism and agricultural sectors. Conversely, the town is also home to the largest craft brewery in the U.S. And that does attract tourists from all over California.
5. The Student Market
Chico is home to a California State University campus. It is the second oldest such campus. It is home to nearly 20,000 students. This has dumped a large number of renters into the Chico real estate market. It also means there is a massive, permanent population of renters for a Chico real estate investment property near the college.
However, this isn’t the only college in the area. Butte College and the Cal Northern School of Law are also located here.
6. The High Chico Rental Rates
The median rent in the Chico housing market is 1900 dollars a month, though you can charge much more for a rented-out single family home. The student market certainly increases the number of renters in the Chico real estate market, but that isn’t the only reason rental rates are high.
The average wages in the Chico job market are lower than the national average, though home prices are far higher than the national average. With a median income of roughly 42,000 dollars, a 300,000 dollar home is out of reach. This means many residents can’t afford to buy property, keeping rental rates high.
7. The Low Tax Burden (for California)
California’s income tax rate is high, but that’s going to affect anyone living and working in the state. One point in favor of Chico is the low sales tax rate. This is one reason why people leaving the big cities choose to move here, especially to retire.
A point in favor of a Chico real estate investment property is the relatively low property tax rate. The effective property tax rate is just over one percent.
This can vary based on special property tax boundaries and tax districts. Conversely, the relatively cheap Chico real estate market results in a low overall property tax bill.
8. The Relatively Affordable Real Estate
The Chico real estate market is affordable when you compare it to the rest of California. The average property in the Chico housing market is selling for around 350,000 dollars. That is a hundred thousand dollars higher than the national average.
However, it is 150,000 cheaper than the average price of a home in Los Angeles. And you can buy three homes in the Chico real estate market for the price of one mid-market home in San Francisco. The Chico housing market is competitive with the more desirable Mount Shasta area.
9. The Relatively Landlord Friendly Environment
Landlord-friendly rules are relative. In the case of Chico, California, you have to compare the rules restricting landlords to the rent control being passed on the California Coast and Oregon’s statewide rent control, not landlord friendly states like Alabama and Texas.
The city of Chico doesn’t have rent control. The city has been slow to regulate short-term rentals, but it hasn’t banned them, either. You can become a legal short-term rental by securing the necessary permits and paying the six percent hotel tax. You don’t have to pay the two percent Tourism Business Improvement District.
10. The Near Certain Appreciation
We’ve mentioned the geographic constraints that limit where one can easily and thus cheaply build a home in the Chico area. The major fire in Paradise will take a long time to recover from, and many affected areas may be allowed to go wild.
This will limit building opportunities and increase prices for remaining Chico real estate properties. At the same time, many homes in the “affordable” range were snapped up by people unlikely to move, wiping out that market sector. There’s nothing under 300K available to potential buyers.
This is why the Chico real estate market saw nearly 14 percent property price increases in 2018 but is expected to see 8 percent appreciation in 2020.
Chico Real Estate Investment
Maybe you have done a bit of real estate investing in Chico, CA but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.
A good cash flow means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.
Therefore, finding a good Chico real estate investment opportunity would be a key to your success. If you invest wisely in Chico rental real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the Chico rentals are, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments in Chico, you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Chico, CA. The Chico housing market provides strong rental returns, a favorable legal and tax climate, and near certain and significant property appreciation.
These are among a few of the reasons to consider Chico real estate investment over “hotter” real estate markets due for a correction.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process.
They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Chico real estate in 2019. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest in Real Estate in 2019
Another good market to choose for investment is Savannah, GA. The Savannah area is evolving from a small town to a regional services hub with a diversified economy. It is never going to be a booming metropolis like Atlanta, but that won’t prevent it from being a great real estate investment.
In fact, many people are moving here for the ideal balance between the small-town feel and great amenities like a world-class hospital and international airport.
The Savannah real estate market is seeing significant appreciation due to strong demand and slower growing inventory. Property prices increased more than five percent in 2019. Prices are projected to increase nearly two percent in 2020.
The other best place to invest in real estate is Knoxville, Tennessee. Forget Nashville and the lure of tourist rental income. Consider investing in an affordable, stable real estate market offering relatively high rates of return like the Knoxville housing market.
The Knoxville real estate market has a larger than expected number of renters because of McGhee Tyson Air National Guard Base. The military base is home to thousands of service men and women. Those who choose to live off base have to rent, driving up rental rates and, indirectly, property values.
Several thousand more people flood into the area for national guard and reserve training or to attend officer school. Demand is so great that there are hotels right by the base to house them, though others rent houses or stay at other hotels in the Knoxville area.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
Rapid growth & Redevelopment
https://en.wikipedia.org/wiki/Chico,_California
Geography
https://en.wikipedia.org/wiki/Bidwell_Park
Job market
https://en.wikipedia.org/wiki/California_State_University,_Chico
The Student Market
https://www.movoto.com/guide/chico-ca/moving-to-chico
The low taxes
http://winningwallet.com/taxRates/CA/Butte/Chico
The real estate prices
https://www.redfin.com/city/3390/CA/Chico/housing-market
https://www.zillow.com/mount-shasta-ca/home-values
Appreciation
https://www.zillow.com/chico-ca/home-values
https://www.mercurynews.com/2018/12/03/chico-housing-market-looks-completely-different-after-camp-fire/
High rental rates
https://www.bestplaces.net/economy/city/california/chico
Landlord friendly
https://www.12law.com/article/city-chico-ca-faqs-about-lease-and-rental-agreements.aspx
https://www.chicoer.com/2018/10/23/short-term-rental-rules-tweaked-by-supervisors
Market Prices, Trends & Forecasts
https://www.zillow.com/chico-ca/home-values
https://www.redfin.com/city/3390/CA/Chico/housing-market
https://www.realtor.com/realestateandhomes-search/Chico_CA/overview
https://www.movoto.com/chico-ca/market-trends
https://www.neighborhoodscout.com/ca/chico/real-estate
https://www.realtytrac.com/statsandtrends/ca/butte-county/chico
