House hunting

Vita Segalla knows exactly what she’s looking for.

It’s a cottage-like home, full of light and windows, maybe even a low-maintenance garden. It would have an open floor plan, a good-size lot, a quiet neighborhood and other, less quantifiable attributes—things like charm, “a good energy” and “a harmonious flow.”

And, oh yeah, the house needs to cost less than $140,000.

She knows it’s a tall order. That’s why Segalla has been looking since March for her dream home. Buying a home—especially for the first time—is always a whirlwind of financial and paperwork requirements, but it’s even more difficult for Segalla because she is self-employed. She teaches meditation and also does massage.

"[The self-employed] don’t look good on paper,” she said. “The banks want to see a stable source of income, not paychecks that come when they do.”

But because she has good credit and a large cash down payment (a whopping $30,000—far more than the 10 percent usually required by lenders), she’s pre-approved for a loan. Now all she needs is a house. She’s looked at dozens since she decided to buy a home after years of renting, but, she said, “I’m kind of particular. I know what I’m looking for, and I just haven’t found it yet.”

But she’s also patient, reassuring herself that eventually the house that’s meant to become her home will come onto the market. Segalla knows that, when that day comes, she’ll have to be ready with an offer in hand.

That’s because in Chico’s booming real estate market, there’s no room for waiting.

No one knows that better than realtor Ken DuVall. Brisk and businesslike, he squeezed in an interview between appointments with homebuyers and sellers. His cubicle at Century 21—which, together with Coldwell Banker, controls 90 percent of the real estate listings in Chico—is packed with mementoes and plaques collected from almost 40 years of selling real estate. Back in the 1970s, he sold most of the homes in the Paradise Pines area.

It’s a great time to be selling real estate in Chico, he said. He pointed out that there are 250 real estate agents in Chico, and (as of last week) only 193 homes on the market—most of which will sell within a day of being listed for sale.

“It’s dynamite right now,” he said. “We get lots of homes that come on the market in the morning and they’re sold that afternoon. Some of them never leave the office—the listing agent just hollers over their desk that they’ve got a listing and another agent has an offer.”

Insulated from the apparent economic uncertainty of the rest of the country, Chico is growing by virtual leaps and bounds these days. And the average housing prices show it. According to the Chico Association of Realtors, the average price of a home in Chico as of August was $178,000. By September—only four weeks later—that had increased by $1,000.

Compare that with 1997 (that’s when the housing boom started to really take off), when the average home here cost just over $130,000.

DuVall, who is president of the CAR, said he worried that the market would start to fall off after the Sept. 11 terrorist attacks, but just the opposite has turned out to be true.

“At first, we all thought we’d be seeing escrows falling out all over the place,” DuVall said. “But we haven’t seen anything like that. … Prices are still going up, as a matter of fact.”

That’s good news for real estate agents and sellers, of course, but it’s not such good news for buyers like Segalla who are working within a budget. She worries that with prices increasing by the week, she’ll be priced out of the market before she can find her home.

“It’s something I think about,” she said. “There’s a lot of people coming in from out of town with a lot of money who don’t think anything about spending $350,000 for a home. That’s cheap for them, but not for us.”

She may be right. The City of Chico’s Housing Office, which offers free mortgage loans to first-time homebuyers with low incomes, reported that there are so few houses on the market for less than $135,000 (the cap to qualify for the program) that it’s given only a fraction of the mortgage loans it usually does.

“We’ve seen situations where the only home that these people can buy is too small or a major fixer-upper that they can’t afford to fix,” said Housing Officer Dennis McLaughlin. “Housing prices here have gone up so high, so fast.”

He pointed out that the city gave out 75 mortgage loans to first-time homebuyers in fiscal year 1999, but only 12 this fiscal year.

“There just aren’t the homes in these people’s price ranges right now,” McLaughlin said.

Real estate agent Bill Carter said that he expects the housing market here is probably “at the top of its game right now.”

“Real estate is a cycle,” Carter said. “I think we’re probably at the top of the cycle right now, and it’s time to slip a bit. Last time we saw a decline, it took us 10 years to get back.”

Still, he said, business remains good, and there are “plenty of people” looking to buy homes in Chico.

“This is a very desirable area for people,” he said. “It’s a place that people want to live, and it tends to sell itself.”

DuVall heartily agreed. He pointed out that Chico is now home to an ever-growing army of big chain stores—and their presence and interest in building here is a good sign for homeowners.

“These massive, deep-pocket companies, they don’t come to a place unless they’ve got numbers that show that this is the place where there are customers with money,” he said. “And we have them right now.”

Plus, he said, Chico has the comfortable, down-home feel that so many refugees from places like the Bay Area are looking for. The way he sees it, Chico is a natural fit for them and a natural progression for the city. He doesn’t worry that a huge pilgrimage of out-of-towners could ruin the small town feel that attracted them here in the first place. When anyone moves here, he said, “they become Chicoans, just like us.”

He forecasted that, even as Chico grows, it would avoid the ugly sprawl that has plagued other fast-growing cities all over the country.

“We only have so much space to grow,” he said. “It’s really a perfect situation. We have the foothills on one side, the Greenline on the other, and ag lands all around. We have about 10 years of growth left, and that’s it. There’s only so much dirt.”

Chico, he said, will always be popular among homeowners.

“We’ve been found out," he said. "[Chico] isn’t a little secret anymore."