Modesto among Top 10 rising housing markets nationally, new analysis finds
Modesto is one of the Top 10 rising housing markets in the country, according to a new analysis by a New York-based financial technology company.
The assessment, released by SmartAsset, ranks Modesto sixth in the nation for rising housing markets. Modesto’s ranking is based on its performance in three metrics: income growth, housing demand and home value growth.
SmartAsset found that between 2014 and 2018, Modesto’s population grew by about 2.7% more than the number of housing units in the city. In that same period, Modesto experienced a home value growth of 54.9%, and a median household income increase of over 20%. SmartAsset also ranks Stanislaus County as the county with the highest home value growth in the state, at 57.55%.
In addition to Modesto, six other California cities made the Top 10 ranking.
Jurupa Valley in Riverside County ranked highest overall, while Lehigh Acres, Florida, came in second. Oakland and Hayward took third and fourth, respectively, while Modesto, Vista, Santa Clara and Berkeley took places six through nine. Aurora, Colorado — ranked fifth — and Phoenix — ranked 10th — were the only other non-California cities in the Top 10 ranking.
Taide Zamora, a real estate agent with PMZ in Modesto, said the ranking is in line with what’s happening in the local market.
“The population grew by 2.7% more than the number of housing units,” Zamora said. “That directly is an indicator of new construction, that new construction is needed. Housing units are not being added at the same proportion as the population growth. That does create a supply issue of housing, while the demand remains steady and growing.”
Right now, he said, homes in Modesto are regularly receiving multiple offers, which means buyers are in a “market that’s requiring a lot of patience.”
At the end of June 2019, there were 326 homes on the market inn Modesto, Zamora said. By comparison, there were 162 homes on the market at the end of June 2020. With inventory half of what it was a year ago and increased demand, buyers are currently outnumbering sellers in Modesto.
In Stanislaus County, more homes were sold in June than those that came on the market, which is not typical, said Chad Costa, a senior managing broker with REMAX Executive in Modesto. He doesn’t expect this trend to change soon, he said, as inventory is still short following a lack of construction from 2008 to 2018.
Zamora said another reason for the lack of homes on the market is the coronavirus pandemic, which, despite impacting the housing market in Modesto less than initially expected, is still affecting sellers more than buyers. Some are wary of opening up their homes to strangers, so listings have decreased. With COVID-19 have come new safety precautions for home showings, including waivers buyers and sellers must sign, mandatory mask wearing and other health precautions.
On the other side of the equation, buyers have shown increased demand due to historically low mortgage rates, and inventory has fluctuated up and down. Currently, Zamora said, there’s about a two-week supply of homes under $400,000 on the market in Modesto.
Costa added that the lack of inventory in Modesto is going to continue until there is an uptick in development. While he said there has been an increase in building across the region in the past few years, there is still a shortage of housing in comparison to demand, especially for affordable housing.
Modesto has also seen an increase of interested buyers from the Bay Area, both Costa and Zamora said, further driving up demand.
“There’s a lot of buyers in the market, because they can afford to buy more house with interest rates that low,” Costa said.
This story was produced with financial support from the Stanislaus Community Foundation, along with the GroundTruth Project’s Report for America initiative. The Modesto Bee maintains full editorial control of this work.
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This story was originally published August 3, 2020 at 4:00 AM.
