Buying Fresno bank owned homes has become cheaper than renting because of the price pressure of foreclosures.
In a buy versus rent index compiled by a real estate analyst, Fresno ranked fourth among U.S. cities where it makes more sense to buy a house than rent. The index considered factors like closing costs, homeowners insurance, taxes, HOA dues and private mortgage insurance.
In the housing affordability index compiled by the National Association of Home Builders for the first quarter this year, Fresno was 46th in home affordability in the region. Two-thirds of homes in Fresno were affordable to households earning the area’s median income. The home price median was $160,000 while the median household income was $52,200.
The effect of Fresno bank owned homes on home affordability can be shown in the prices of homes auctioned off in Fresno recently by a private auction firm. One home with a starting bid of $99,000 was previously appraised at $458,860. Another had a starting bid of $5,000, far below its previous appraisal of $135,000.
Home buying opportunities for renters have come at the most appropriate time in Fresno since record number of renters in the area lost their rental housing when their landlords defaulted on their mortgage loans.
Based on data from California-based organization Tenants Together, over 200,000 renters in the state were displaced in 2009 when their rental homes entered bank owned property listings. Of the 211,154 distressed housing units in California in 2009, a total of 77,145 units or 37 percent were rentals. Those that eventually became bank owned properties in California included condos, single-family homes and multifamily properties that were offered as rental housing.
In Fresno County, a total of 5,562 tenants were affected when their rental homes were repossessed. Another 6,700 tenants were affected in nearby counties of Madera, Kings, Tulare and Merced.
The good news for these renters is that they have opportunities to finally become homeowners by taking advantage of lower-priced Fresno bank owned homes.
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