Blog Post 2
Monday, April 9, 2012
Small Town Real Estate Market
by: Mario Jauregui
Blog Post 2
Blog Post 2
When searching for a new home to purchase people look at many factors that help them determine the value of the home they are looking for. Researching the real estate market in the area where one wants to live in is very important prior to buying a home. When an individual looks at the full spectrum of property values they take into consideration knowledge of when the home was built, the lot size, square footage of the home, how great the education is in the surrounding schools, crime statistics of the city and neighborhood, the status of the neighborhood where the home is, and many other factors that can affect the property value of the home. Perceived value will also play a roll in how much an individual can buy a home for, this can drive the price of the home up. Most often market values of properties are almost always decided by the property’s accessibility. “The more accessible a site, the higher rent a site can command, a higher rent would result in higher land value” (Diaz, Julian). There are times when property values vary in prices even though they might have the same accessibility. Reedley California is a small town of a population close to 25,000 (Welcome to Reedley). Reedley is a quiet community with a beautiful flowing river and a junior college. Reedley was incorporated in 1913 (Community History), since then there has been great expansion that brought along new housing development opportunities. As the city expands and new housing is available for the citizens, the older developments get left behind and, as it typically happens, these older neighborhoods are the ones that are valued the lowest in the city and the newer ones have a higher price. Although this is true in Reedley, there is a good mix of price ranges between newer and older developments. The factors described earlier determine the value of the homes in Reedley California, which separates them into three categories: low-income housing, middle class homes, and upper class homes.
Reedley’s real estate market is not a huge market, but it provides a good example of how home values relate to accessibility of the land and also to the relating determining factors within the surrounding area. For low-income families there are different areas in the city where an individual could either rent a property or purchase one. This area of the city has great accessibility to many resources, although accessibility is great, the northeastern part of the city has many factors that drive real estate prices down. In the northeast part of the city there is an apartment complex, Meadowbrook Apartments, that has very affordable units for low-income families. An individual can rent an apartment here for as low as $550 a month (Rodriguez, Lisa). The majority of the people who live here are low-income families. The surrounding area has businesses like Town & Country Supermarket; prices here are competitive and cater to lower-income individuals who are looking to put more food on their family’s table. Other businesses like small mom and pop shops provide the area with products for everyday living. Camacho Park is a community park that is moments away from Meadowbrook Apartments. Jefferson Elementary School is the nearest elementary school and General Grant Middle School is the nearest junior high school. Both schools have received government grants to build new facilities for staff and Grant Middle School has a new gym. Both schools have an average of 60% of students that are economically disadvantaged (ed-data). Income is greatly related to the amount of crime in an area, in Reedley crime is balanced out evenly in all areas of the city. This area in particular, there has been many gang related crimes that have gone unreported due to retaliation if anyone says anything to the police (Campos, Julio). Property values in this area of Reedley are lower than most in the city. Guarantee.com has many listing of home in the area that go for less than $115k. Some of these homes were built in the early 2000’s and they are priced less than $135k. Other homes were built in the 1960’s and go for either the same price or a little less. It is possible that the area in which these properties are in have their value affected by the environment around them. Even though property values are down in this area, there is opportunity for an entrepreneur to invest their money in a home or apartment complex. This is a good area to purchase an investment property at a low cost to lease out to renters or purchase a commercial property to start a business at a low start up cost.
In Reedley there are different areas where the middle class live in. The east side of Reedley has some homes that just went up in the early 2000’s. These homes prices range from $250k to $145k (Zillow.com). The south side has had growth with some new development with home prices that range from $190k to $125k (Zillow.com). Another newer development is in the north part of Reedley, here home prices range from $225k to $185k (Zillow.com). Some of these areas do not have great accessibility such as the east and south developments. Home prices are still higher than the northeast part of Reedley where accessibility to resources is much better. What drives the prices of these homes up is the value of the homes around them. Since these developments are newer the neighborhoods have not been negatively impacted by too many foreclosures or other events that might drop the price of the home. The closest school for the north side of Reedley is TL Reed. This school has a waiting list because it attracts many people to its new facilities and extra curriculum for after school students. On the east side, the closest school to these homes is Silas Bartsch School. This new school will be going into its fifth school year in the fall of 2012. These areas of Reedley have low crime rates and very little gang activity. They are closely located to the troubled areas but have little affect from them. The homes in these areas of Reedley have been able to hold their value better than most areas in the city due to these areas being newer developments. When there are neighborhoods with problems like foreclosures, it is possible that the value of the homes in the area will drop because these foreclosures will sell at a lower price than what they are valued at. When homes are sold at a lower price it makes the value of other homes around the area drop, which might be the case in some of the least valued neighborhoods in Reedley. These homes have not been around long enough for so many negative events to happen to them.
When speaking of value, several of the most valuable homes in Reedley are on the west side of town, right next to the river. The lowest price for a home in this area is about $225k (Zillow.com); those who are in the upper class of society live comfortably in this area. The size of these homes will range from 1,800 square feet to 3,500 square feet. Some of these homes were built in the early 1990’s and many more continue to be built in empty lots as the years go by. Those who live in this part of town hold careers such as doctors, physicians, successful business owners, tenured teachers, and farm owners. Very little crime is in this area; the individuals living here are secluded and are very familiar with each other and what is going on in their neighborhoods. Any strange car rolling around the block can be suspicious and police will not hesitate to pull over someone to check out what they are doing in the neighborhood. This part of town has great accessibility to the main roads in the city, Manning and G Street. There is a private school, Immanuel, located about 5 minutes away from the area. This school holds many high standards and practice religion in their school curriculum. This part of Reedley has some of the best neighborhoods where an individual can live in peace knowing that the value of their home will not be greatly affected by many foreclosures. About every ten years there is a newer and bigger home built in this area, this helps keep the value of the homes in the neighborhood higher than most homes in Reedley.
In conclusion, Reedley California is an overall a great small city. The real estate market here is comparable to just about any other reasonable market in the Central Valley. Accessibility does play a big roll in what the property value will be, but there are also many other factors that need to be taken into consideration. Reedley has a range of homes that have both good accessibility and not so great accessibility. All these homes range in property value that is greatly determined by the surrounding neighborhoods. Homes that are priced higher are located around other homes that have a high price and are also located in areas where families can send their children to a good school and still get to work easily by taking the main roads. Lower priced homes are located in the same neighborhoods where there are other lower priced homes and have great accessibility to public schools and local businesses, their value is greatly affected by the amount of foreclosures in the same neighborhood. There will always be opportunity to invest in property whatever the price of a home might be. People just need to be aware of where the home is located so that they are paying the correct price for what they are getting.
Campos, Julio. "Life In Reedley." Personal interview. 01 Apr. 2012.
"Community History." Welcome to Reedley. City of Reedley. Web. 02 Apr. 2012. <http://www.reedley.com/community-history.html>.
Diaz, Julian, and J. Andrew. Hansz. Real Estate Analysis: Environments and Activities. Dubuque, IA: Kendall Hunt Pub. 2010. Print.
"Ed-Data." Pages. Educational Data Partnership. Web. 01 Apr. 2012. <http://www.ed-data.k12.ca.us/Pages/Home.aspx>.
"Fresno Clovis Homes, Fresno Real Estate, Guarantee Real Estate." Fresno Clovis Homes, Fresno Real Estate, Guarantee Real Estate. Guarantee. Web. 04 Apr. 2012. <http://www.guarantee.com/>.
Rodriguez, Lisa. "Meadowbrook Apartments." Telephone interview. 28
"Welcome to Reedley." Welcome to Reedley. City of Reedley. Web. 02 Apr. 2012. <http://www.reedley.com/mission-statement.html>.