The Fresno-Madera housing boom has majorly cooled off

During the COVID-19 boom, Fresno realtor Jeff Zimmerman had a routine customer: a techie from the Bay Area. With a remote, salaried job in hand, they would often come to Zimmerman to trade in their newfound flexibility for a Fresno classic: three beds and two baths.

“It was like the housing market on crack,” said Zimmerman. “They moved from renting out a two bedroom townhome in the Bay to buying a really large, 3,800 square-foot home near Buchanan.”

Now, however, that well of out-of-town buyers has gone dry, and Fresno is feeling the punch.

Across the San Joaquin Valley, the pandemic-era feeding frenzy of housing has given way to a market frozen in place – too expensive for buyers, too precious for sellers to let go. Unsold homes have piled up to near-record levels, surging 110% in the Fresno area since their 2021 lows, according to the database Reventure.

“We certainly haven’t seen as many since those COVID days,” Zimmerman said of his old Bay area customers.

Many of Zimmerman’s Bay Area emigres remain happily in Fresno, but the housing slowdown hasn’t given way to a typical buyer’s market. Home prices refuse to budge downward even as sales plummet and inventory swells. Instead, builders have slashed production rather than prices, while existing homeowners cling to their properties and the low mortgage rates they locked in years ago.

New construction sales in Fresno have tumbled to 65 homes last month, according to Multiple Listing Services, a database for realtors, down from 96 at their June 2023 peak. Building permits – the canary in the construction coal mine – have collapsed to recession-era levels, with Fresno on track to file just 700 this year, according to HUD data. That’s a more than 50% drop from 2021’s peak.

Meanwhile, Fresno’s average home price hovers at $506,000, according to MLS, requiring a household income of $135,000 to afford – more than double what most Fresno households earn. Across Fresno and Clovis, new homes are sitting for 30-60 days before being sold.

Boomtown or deadtown? Madera feels the pinch

The slowdown is particularly acute in Madera County’s new developments, where sales peaked in November 2024 and has been declining since. In the sprawling new communities across the river, only eight homes were sold last month, according to MLS data – an 80% drop from Madera’s peak last year. On average, homes sold there last month sat on the market for an average of 83 days.

Brittany Brannon, a real estate agent who specializes in Madera’s Ranchos area, said several factors are creating headwinds for what was once a red-hot market.

“We’ve just been deemed as a high fire area,” Brannon said of the Ranchos neighborhoods near the foothills, referring to CalFire’s new fire hazard maps. “Unfortunately, because of that, people are coming out here and liking things but now I require that the buyer has checked with a home insurance provider before we will even take their offer.”

The insurance sticker shock is killing deals, Brannon said. Buyers are discovering their insurance would jump from manageable payments in Clovis to “$8,000 a year” in the fire-prone areas. “We’re losing these deals because of the inability to be willing or able to afford the fire insurance,” she added.

Even in Riverstone, a master-planned community that feeds into the sought-after Golden Valley Unified School District, the market has softened only a year after Madera developers filed a huge bump in permits. Spec homes are sitting with massive incentives – one model home is offering $45,000 to $55,000 off, plus all the furniture, Brannon said.

“They’re even willing to part with all of the furniture just, just give us an offer. We don’t care, and it’s still sitting,” she said.

Buyers are hoping either interest rates plummet or developers blink first. “Our buyers are starting to pull back a little bit with the anticipation that they think that the prices are going to come down,” Brannon explained.

Don’t expect relief like in 2008

But the current market standoff bears little resemblance to the 2008 financial crisis. Back then, adjustable-rate mortgages exploded like time bombs in homeowners’ monthly budgets, triggering a cascade of foreclosures that flooded the market with cheap properties.

Today’s slowdown has almost the opposite happening. Homeowners who secured mortgages at historic lows during the pandemic are reluctant to sell and take on higher rates elsewhere. The result is that even in a weakening economy, prices don’t budge and most homeowners can afford to stay put.

“As far as a sale price goes, they’re concerned about having enough to make their next move,” Zimmerman said.

As a result, different neighborhoods are experiencing different trends depending on demand on a block-by-block basis. 

The Tower District and Old Fig Garden neighborhoods have seen prices decline about 5% over the last year, according to Zimmerman. Woodward Park, located below Clovis North High School, has seen average prices increase 5% over the same period. The Copper River area – the most expensive neighborhood in Fresno – has maintained its average price point around $800,000.

Even if recession strikes, Zimmerman expects minimal relief because history shows housing to be a safe investment. Home prices typically dip only 3% during downturns, Zimmerman said: a rounding error compared to the correction needed for typical Fresno families to afford homes again.

A return to pre-pandemic prices would require something far more dramatic, Zimmerman said: a decline in home prices that would erase trillions in household wealth nationwide.

“Going down to prepandemic levels? That would be crazy,” said Zimmerman. “There would have to be something external in Fresno, right? You know, like we become the next Rust Belt.”

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