Housing demand remains high

New housing likely to stay expensive

A seller’s market persists in Chico as housing prices and desperation for affordable housing rise, although supply is hoped to begin to increase in coming months.

Coldwell Banker market analyst Carl Henker said Wednesday the Butte County housing inventory report for March indicated average sales prices are $410,154 in Paradise, $260,700 in Magalia, $461,553 in Chico and $309,482 in Oroville.

Seven Chico homes listed above $1 million in March, with one pending sale. Another in Paradise over $1 million is pending as well. There was slightly more movement in Chico in March with 144 pending and 79 listed, while Oroville hardly changed with 70 listed and 88 pending.

The average days homes spent on the market in each city or town were:

• Paradise, 36 days;

• Magalia, 50 days;

• Chico, 25 days;

• Oroville, 51 days.

This would be the season to see inventory increasing, Henker said, but that isn’t happening. There is high demand, mostly from local buyers, and inventory is not yet increasing quickly enough.

“The downside of what happened is Paradise is not going to be the affordable housing alternative to Chico that it was in the past,” he said, which is partly due to construction prices and housing prices.

Interestingly, home values in Magalia are significantly lower, in part because the commute to Chico is longer and goes through the Camp Fire burn scar, he said. Lots in Magalia are worth about a third of the value of a comparable lot in Paradise, according to Henker, and sell twice as quickly as in Paradise even if they take longer to move.

Despite building underway in Chico and Paradise, “I don’t see anything that’s going to change what we’re seeing in the near future,” Henker said, adding he thinks pandemic restrictions being lifted may not affect individual sellers much. Some buyers are fire survivors from the North Complex fires from Berry Creek, but he said he knows some Camp Fire survivors are still waiting on funds from PG&E before purchasing.

Paradise has 2.9 months’ supply of housing, while Magalia has 2.3, Oroville has 1.9 and Chico has just 0.9, according to Coldwell Banker.

“A healthy housing market should have six months supply of housing, which helps to keep pricing stable,” Henker said. “The seller’s market that we are in nationwide is going to be with us for quite some time.”

While building faces multiple issues in the other cities, the supply issue may begin moving soon in Chico. As of Wednesday, Community Development Director Brendan Vieg reported that housing under construction, to be completed within the calendar year, is as follows:

• Single-family units —

102 units

• Multi-family units — 618 units

• Duplexes — 4units

• Accessory Dwelling Units — 56 units

Projects under review include:

• Single-family units — 27 units

• Multi-family units — 541 units

• Duplexes — 12units

• Accessory Dwelling Units — 29 units

Affordable housing

Residents’ concern about the housing crisis has clashed in recent months with local stakeholders and developers, as was clear from Chico’s virtual Housing Element workshop Feb. 10.

The Housing Element City of Chico data showed housing development has been focused on homes priced in the ”above moderate income” affordability range and dominated development with 77.5% of housing built with Regional Housing Needs Allocation. Nearly 46% were built in the moderate income range.

According to this report, Chico rents have increased from 2017 to 2020, during which the average rent for existing units went from $985 to $1,113, an overall increase of about 13%. This data did not reflect rents on units under construction. The report also revealed 85% of Chico households earn less than $50,000 annually and spend more than a third of monthly income on rent — the state threshold for determining when housing is outside of affordability for a tenant.

These trends reflect a growing cause of concern throughout the state. Nine out of 10 Californians told a statewide poll from the Public Policy Institute of California that housing affordability continues to be a problem in their region, and nearly half said housing costs are making them seriously consider moving.

The poll report noted results particularly affect historically disadvantaged groups, as nearly 70% of Black respondents cited housing affordability as a big problem, along with 54% of Latino respondents, in the survey.

The National Low Income Housing Coalition’s new report “The Gap: A Shortage of Affordable Rental Homes,” details the deficit of homes available to low-income renters — disproportionately people of color — and stated California has a shortage of more than 1.3 million rental homes.

According to the report, for every 100 lowand very low-income households, there are only 34 affordable and available rental units. Nearly half of all very low-income households are spending more than 50% of their income on housing costs and utilities.

Transitional housing

The lack of open housing also affects other Butte County programs working to quickly house unsheltered people through the Project Roomkey program. The county’s Housing and Homeless Administrator Don Taylor said as of March 24, “some of the contracts we have in place have been extended through the end of June.”

“We currently have 107 individuals in 86 rooms countywide,” he said.

That number adjusted to 70 people in hotels Tuesday, according to Department of Employment and Social Services Director Shelby Boston.

“We continue to work with our partners in securing apartments, studios and rooms within shared housing as availabilities open up,” Taylor said. “It is still a struggle to find affordable low-income housing in Butte County and will continue to be so for years to come.”