These are turbulent days in the once laid-back town of Chico, CA, which has been overwhelmed by an influx of residents of Paradise, the town just 14 miles down the road that was leveled by the state’s deadliest wildfire in November. According to the latest research from realtor.com®, that churn propelled Chico to be the hottest market in the U.S. in December.
The realtor.com monthly analysis looks at which markets are getting the most listing views, and where homes are flying off the market fastest.
“It’s just insanity,” says Sabrina Chevallier, a Realtor® with Re/Max of Chico. We were able to catch up with her just briefly between appointments—she says her schedule has been packed.
“It’s been a really challenging market to gauge realistically where prices are headed,” she says.
For example, she says that one week, a home will sell for $50,000 above list price. Two weeks later, a house with an identical floor plan and amenities, in a comparable neighborhood, will get $30,000 less than asking.
Chevallier thinks that it all comes down to timing—specifically, of the insurance checks that are starting to roll in for fire victims. About 95% of her clients right now lost their home in the Camp Fire.
“You’re getting people who are getting more money from insurance than they’ve ever seen in their bank account in a lifetime,” she says. These buyers tend to look at the same types of homes—so cue the bidding wars that drive up prices. Then, a couple of weeks later, there will be a slowdown because there aren’t as many buyers with cash to burn.
Sensing opportunity, a handful of builders have rushed to fast-track construction projects that had been green-lighted, but weren’t slated to break ground until spring, Chevallier says. Still, it will be months before those projects will be ready to house buyers.
Our analysis shows that Chico listings are moving fast. An average Chico home spent 37 days on market in December; in Midland, TX, the next hottest market, homes took 51 days to sell.
Watch: Paradise lost
Yet Chico’s rise is not just a natural-disaster-induced fluke. More than ever before, smaller secondary markets are in demand, realtor.com research shows.
“They’re not just smaller, but also lower-priced,” notes Javier Vivas, director of economic research at realtor.com.
The cumulative value of the top 20 hottest markets in December, based on median list prices, is the second lowest since the team began tracking in May 2013. The lowest-valued list so far was November. (The numbers have not been adjusted for inflation.)
“We’ve seen affordability reach a tipping point in large, high-cost markets, generating this trickle-down effect into secondary markets,” Vivas says.
Historically, he adds, secondary markets would rise to the top if the economy were good and jobs were plentiful.
“Now, the secret sauce is just ‘Is it cheap?’” he says.
The hot list
|Rank (December)||20 Hottest Markets||Rank (November)||Rank Change|
|5||Fort Wayne, IN||2||-3|
|6||San Francisco, CA||8||2|
|8||Colorado Springs, CO||6||-2|
|14||Yuba City, CA||13||-1|
|20||Boise City, ID||10||-10|