Aug. 14, 2017

Housing Inventory Down in Shasta County

Housing Inventory Down in Shasta County

Spring is traditionally the busiest season for real estate in Shasta County. Buyers, experiencing cabin fever all winter, emerge like flowers in search of their dream home. Redding area homeowners, in preparation for the increased demand, are enticed to list their house for sale and move on to the home that will better fit their needs.

Curious what your home may be worth...?

INSTANT HOME VALUATION

Check the value of your home instantly at www.reddinghomes.com/cma/property-valuation/

New data from CoreLogic shows that even though buyers came out in force, as predicted, many homeowners did not make the jump to list their home in the second quarter of this year. Frank Nothaft, Chief Economist for CoreLogic had this to say,

“The growth in sales is slowing down, and this is not due to lack of affordability, but rather a lack of inventory."

Overall inventory across the United States is down for the 25th consecutive month according to the latest report from the National Association of Realtors and now stands at a 4.3-month supply.

REAL ESTATE IS LOCAL

Market conditions in the starter and trade-up home markets are in line with the median US figures, but conditions in the luxury and premium markets are following an opposite path. Premium homes are staying on the market longer with ample inventory to suggest a buyer’s market. See all homes for sale in Shasta County at www.reddinghomes.com

Bottom Line
Buyers are out in force, and there has never been a better time to move-up to a premium or luxury home. If you are considering selling your home and moving up this year, let’s get together to discuss the exact conditions happening in Redding and surrounding areas today. Please contact me at 530-222-3800 or email josh@reddinghomes.com

Posted in Josh's Blog
Aug. 3, 2017

Shasta County Market Update - August 2017

From the desk of Josh Barker @ RE/MAX

If you've been listening to the recent news reports coming out across the country, many people have been asking the question "Are we in a housing bubble?" or "..is there a housing bubble forming?". This month I'll break down what happened during the last housing bubble in 2006 and what signals to look out for in the future.

Click Here to watch Josh's video blog for the month of August


Some of the hotter real estate markets in the state with very strong economies such as the bay area and Southern California may be beginning to form a bubble. These areas are primarily fueled by the tech industry and are experiencing a large wage increase, liquidity increase, and an increase from foreign investment. 

Here in Shasta County, our local economy continues to be stable, and we have not experienced any dramatic shifts in income or capital which would inflate the housing market prices beyond normal levels. All things considered we are in a very balanced housing market at this time.

What caused the previous housing bubble?

Looking back at the previous housing peak of 2006, nearly 50% of all loans were classified as "sub-prime" loans. Meaning that, the government wanted to allow more buyers to enter the housing market. The way they achieved this was to lower the credit score guidelines, lower the debt to income ratios and ease underwriting requirements. These lending practices resulted in new buyers to the market and also drove home prices up as a result.

Nearly 30% of purchases were based solely on investment or speculation. Real estate speculators are buyers who purchase a property with the intention to resell for a profit in a shorter period of time.

Close to 40% of loans were inferior loan products such as interest only or negative amortization loans. Inferior loan products are usually associated with a significant payment increase in 3, 5 or 7 years. Unfortunately, so many of these loans defaulted and fell into foreclosure since the homeowners could not afford the new higher payment.

New construction back in 2006 was at an all time high... There was a abundant re-supply of inventory to the market that was taking place at the same time we had the loose lending guidelines. 

All of these factors contributed to the perfect recipe for a housing crash.

What's going on in the housing market today?

Shasta County's housing market today is performing extremely well and is very stable. Over 90% of all home purchases are based on "prime loans" such as a 15 or 30 year fixed mortgage. Today's buyers are high quality buyers with great credit scores, excellent work history and good tax returns. Only an estimated 10% of home purchases are to investors, and very few speculators are participating in the market at all. The lending practices have improved significantly over the past 10 years, and the inferior loan products we had in 2006 are absent from the market.

New construction is currently very low and most of these homes once completed are sold in a short period of time.

What are the signals that could contribute to a housing bubble?

1. More "sub-prime" buyers entering the market through less strict lending guidelines. 

2. An significant increase in speculation and investment purchases.

3. Bad loan products including interest only and negative amortization returning to the market.

4. Massive amounts of new construction which could over-supply the market and drive prices down.

In addition to the signals mentioned, there are several external factors to watch out for as well. For example, economic factors such as employment and inflation could have an impact on housing. In addition, a significant interest rate increase could have a negative impact on home prices. These external factors play a major role in home prices and are very difficult to predict. 

If you have any questions regarding our local real estate market, please feel free to give me a call today at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
July 26, 2017

A ‘Buyer’ in Hand is Worth Two in the Bush

 

 

In Redding's highly competitive seller’s market where there are more buyers than there are homes for them to buy, some sellers may feel like the ball is in their court. And they would be right when it comes to choosing which offer to accept, the closing date, or even which improvements they are willing to make to the home prior to selling.

One thing to remember though, is that there is always a line that shouldn’t be crossed.

Interest rates can change, financing might not go through, the appraisal may not come back at the price that you have agreed to. These are all opportunities to work with your buyer to make sure that the sale still happens.

You may think that, because buyer demand is so high right now, you can choose to make your buyer jump through hoops. But what happens if they reach their limit and need to walk away? You’re starting over… weeks, maybe months later… and other buyers may wonder what’s wrong with the house since the last deal fell through.

 

See all homes currently for sale in Shasta County at www.reddinghomes.com.

The Golden Rule
We were all taught from a young age to “treat others as you would like to be treated.” This shouldn’t change once you have a buyer who seems as though they would do anything to buy your home.

If you're thinking of listing your house for sale this year, now may be the time to do so! Check out Josh's Proven Home Marketing Strategies to see we can assist you in the selling of your home. Please call our office at 530-222-3800 or email josh@reddinghomes.com for more information.

Posted in Josh's Blog
July 19, 2017

Thinking of Selling? You Should Act NOW!

If you thought about selling your house in Redding this year, now more than ever may be the time to do it! The inventory of homes for sale in Shasta County is well below historic norms and buyer demand is skyrocketing. We were still in high school when we learned the concept of supply and demand: the best time to sell something is when supply of that item is low and demand for that item is high. That defines today’s real estate market.

Lawrence Yun, Chief Economist at the National Association of Realtors, recently commented:

“Buyer interest is solid, but there is just not enough supply to satisfy demand. Prospective buyers are being sidelined by both limited choices and home prices that are climbing too fast.”

"Current demand levels indicate sales should be stronger, but it's clear some would-be buyers are having to delay or postpone their home search because low supply is leading to worsening affordability conditions."

In this type of market, a seller may hold a major negotiating advantage when it comes to price and other aspects of the real estate transaction, including the inspection, appraisal and financing contingencies.

Bottom Line
As a potential seller, you are in the driver’s seat right now. It might be time to hit the gas. If you have any questions regarding the Redding Real Estate Market, please feel free to contact me at 530-222-3800 or email me at josh@reddinghomes.com.

Check out Josh's Proven Marketing Strategies for more information about selling your home.

Posted in Josh's Blog
June 28, 2017

Shasta County Market Update - July 2017

From the desk of Josh Barker @ RE/MAX

The temperature is rising and so are home prices in Shasta County. This summer has proven to be another strong year for real estate sales. The average sales price is up by over 5% compared to the average sales price of last year and the number of active homes for sale is remaining steady. This month we will review several of the hottest topics trending now in our local market. As always, if you have any additional questions feel free to email josh@reddinghomes.com or contact the office at 530-222-3800.

Have a great summer!

Your Realtor
Josh Barker

Click Here to watch Josh's video blog for the month of July


New Construction

As I have spoken about in previous updates, the amount of new construction taking place in the greater Shasta County area is weak compared to other markets in California. There are several factors contributing to this phenomena. The largest factor is clear... Home prices have have not reached a point in which developers can acquire property, develop the property, pay the necessary fees associated with building the home and of course realize a modest profit. 

Up to this point... The majority of new construction that has taken place in our county over the past several years has been possible for several major reasons. Either, the home builders already owned the land they are developing or, the builder purchased an existing development for a fraction of its original value from 10 years ago.

Low new construction inventory often equals an increase in overall home values. It's a simple example of supply and demand. When the supply of a product (in this case homes) is constant or low, and the demand for the product is high, prices rise. This simply means as long as interest rates remain relatively low and new construction remains low, we can expect to see additional home appreciation.

As home prices slowly climb, we can expect to see an increase in land acquisitions. This is good news for property owners that have been sitting on vacant land for an extended period of time.

You can view new construction in our local market at www.reddinghomes.com

Home Marketing And What You Need To Know

The days of the office caravan are long gone. In the old days, agents toured homes prior to showing clients. In many cases, the agent selected the homes in which the buyer would view. Those days are gone, and if a home owner expects their home to be shown to perspective buyers then it better look amazing online. Statistics prove that well over 90% of buyers start their search for a home online. It is for this reason that photography and supporting marketing materials such as virtual tours, drone video, and property descriptions must be on point.

Home buyers in today's market typically play a major role in the homes that they will ultimately view in person. The more attractive the home is perceived online typically translates into the number of showings a homeowner can expect to receive. We can probably all relate to the old saying that "a picture is worth a thousand words". In real estate, "that picture" is the picture that home buyers sees first when searching online. If the first photo is amazing, the chances of a home buyer clicking on that particular listing and learning more increases dramatically. 

You can view our home marketing plan at www.reddinghomes.com/proven-marketing-strategies

Interest Rates 

The average interest rate is hovering right around 4.25% for a 30 year fixed mortgage. Last summer the average interest rate was 3.75%. This certainly does not sound like much of a change, however, the Federal Reserve is claiming we can expect to see additional interest rate hikes in the future. In the short term, we do not expect to see any significant impact to the housing market due to interest rates. Keep in mind, for every 1% increase in the interest rate, a borrower will pay up to 10% more in a monthly payment.

Bottom Line

The housing market in the greater Shasta County region is very stable. We have not witnessed a crazy increase in home prices, or a major new construction boom either. These factors have all contributed to the overall stability that we a currently experiencing. The boom and busts that have plagued other markets like Las Vegas, or the Bay Area may spill over into our local market slightly, but we expect our local housing market to remain stable overall. 

You can check the value of your home instantly at www.reddinghomes.com/cma/property-valuation

Posted in Josh's Blog
June 16, 2017

4 Reasons to Buy in Redding This Summer!

 

4 Reasons to Buy in Redding This Summer

Here are four great reasons to consider buying a home in Redding today, instead of waiting.

1. Home Prices Will Continue to Rise
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 7.1% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.9% over the next year.

The bottom in home prices has come and gone and Shasta County home values will continue to appreciate for years to come. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained around 4%. Most experts predict that they will begin to rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You are Paying a Mortgage
There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage - either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you? 

4. It’s Time to Move on with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy. See all Shasta County homes for sale at www.reddinghomes.com

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings. Call 530-222-3800 or email josh@reddinghomes.com with any questions you have regarding the Shasta County Real Estate Market.

Posted in Josh's Blog
June 8, 2017

Shasta County Market Update - June 2017

Click Here to watch Josh's video blog for the month of June


From the desk of Josh Barker at RE/MAX
First and foremost I hope all of you are well and off to a great start this summer! The lakes are full, we are surrounded by snow capped mountains, and the weather is amazing. This month we will be sharing several of the hottest topics trending now in Shasta County. If you have any questions please feel free to contact me.

Your Realtor,
Josh Barker

Shasta County Home Sales
Summer is here and the Redding real estate market continues to move at a hot pace. In fact, the total number of home sales year-to-date are very similar to the number of sales last year. The year-to-date numbers show that 1188 homes closed escrow so far in 2017. Last year, 1192 homes closed escrow by the same point. The numbers prove that the local housing market is performing very similar to last year. 

NEW LISTINGS
We experienced a jump of over 15% in new listings coming to the market during the month of May compared to last year. This trend was expected since we had an unusually long rainy season this year which caused many homeowners to delay putting their homes on the market. 

2016 vs 2017 Home Sales
The Shasta County real estate market is performing almost identical to last year in regards to sales and inventory. However, one significant change is the average sales price. Over the past year the average home sale price has increased over 5% to $271k, up from $257k a year ago. Many sellers have experienced fewer days on the market this year due to a lower inventory of homes for sale. Our local Shasta County Board of Realtors produces a report showing the average list prices as you can see below. 

  

You can check the value of your home instantly at
www.reddinghomes.com/cma/property-valuation

NEW CONSTRUCTION 
New construction in Shasta County has picked up this year compared to last year. Anderson Ca, has experienced a noticeable increase in housing starts over years past. This is partly due to the pro growth agenda of the city of Anderson reflected in its permit fees. The city of Redding has also experienced an increase in permits pulled year to date compared to last year. 

You can view all new homes for sale at www.reddinghomes.com.

  

The largest challenge for home builders currently is making the math work. Land acquisition, development cost including design and engineering, permits and fees, and of course material and labor all cost much more than in years past. Existing home prices are simply not high enough to allow builders to take risk and develop at any meaningful level. As home prices inch forward, you can expect this trend to slowly change.  

BOTTOM LINE
The number of homes listed for sale this year and the number of homes selling this year are nearly identical to last year. The average sales price has increased by over 5% compared to last year. Although new construction numbers are up over 2016, the numbers are still much lower than anticipated. 

If you have any questions regarding our local real estate market, please feel free to give me a call at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
June 1, 2017

#1 Reason to List Your Home in Redding

If you are debating listing your house for sale in Redding this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes for Sale 

The National Association of REALTORS’ (NAR) Chief Economist Lawrence Yun recently commented on the inventory:

“Last month’s dip in closings was somewhat expected given that there was such a strong sales increase in March. New and existing inventory is not keeping up with the fast pace homes are coming off the market."

The latest Existing Home Sales Report shows that there is currently a 4.2-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market, and 4.6% lower than a year ago.

See all homes currently for sale in Redding and Shasta County at www.reddinghomes.com

The chart below details the year-over-year inventory shortages experienced over the last 12 months:

Anything less than a six-month supply is considered a “seller’s market”.

Bottom Line
If you've thought of listing your home in Redding for sale, let's get together and discuss the supply conditions in your specific neighborhood. We will assist in gaining access to the buyers who are ready, willing and able to buy now! Please feel free to contact me at 530-222-3800 or email me directly at josh@reddinghomes.com.

Posted in Josh's Blog
May 23, 2017

New Construction in Redding

Redding and Shasta County New Construction

The biggest challenge to Redding's housing market is the shortage of inventory for sale. A typical market would see a six-month supply of homes for sale. Currently, that number is below four months. This is the major reason Shasta County home prices have continued to appreciate at higher levels than historic averages.

INSTANT HOME VALUATION
Check the value of your home instantly at www.reddinghomes.com/cma/property-valuation

The good news is that builders are now starting to build more homes in lower price ranges. As you can see below, the City of Redding Building Division permit report shows that 2017 is off to a good start.

City of Redding New Construction

Builder Confidence is Up
The Housing Market Index from the National Association of Home Builders (NAHB) reveals that builder confidence increased last month. HousingWire quoted NAHB Chief Economist Robert Dietz about the reason for the increase in confidence amongst builders.

“The HMI measure of future sales conditions reached its highest level since June 2005,
a sign of growing consumer confidence in the new home market.
Especially as existing home inventory remains tight, we can
expect increased demand for new construction moving forward.”

Builders are Meeting the Needs of Today’s Purchaser
Builders are not only jumping into the market – they are doing a better job of matching current demand. The Wall Street Journal recently reported. We can see that same trend happening here in Shasta County, with developments like Shastina Ranches among others we can expect to see new construction continue through the summer and fall.

 

The graph below compares 2016 to 2017 new construction sales by price point. As we can see, builders are slowly beginning to shift to prices more favorable to the first-time and non-luxury buyer.

Redding and Shasta County New Home Sales Prices

Bottom Line
There is a drastic need for a larger supply of home inventory to meet the skyrocketing demand, and builders are finally doing their part to help rectify this situation. Some homeowners will begin thinking of selling their current home to move-up to a newer home. This will help those first-time home buyers find a house suitable for their needs and price point. Check out what's for sale right now at www.reddinghomes.com

Posted in Josh's Blog
May 5, 2017

Shasta County Market Update - May 2017

Click Here to watch Josh's video blog for the month of May


Average Home Values on the Rise in Shasta County

Shasta County Home Sales
In April, home sales were down by 12.5% compared to the same month last year. (See slide below). This change is largely due to the reduction of distressed and foreclosure listings available.

 Shasta County Sold Listings - May 2017 

Currently there is a shortage of active homes listed for sale. In fact, in Shasta County home inventory is down by over 21%. Naturally when buyers have fewer homes to choose from, fewer transactions take place. As more listings come to the market in the later spring and early summer months, overall sales are projected to increase as well.

Shasta County Active Listings - May 2017

Home Price Changes Over the Past 10 Years

The graph below illustrates how the real estate market in Shasta County has performed over the past 10 years. The dramatic dip in 2012 represents the bottom of the market and the lowest home prices in 13 years. Currently, homes are selling for similar prices that were available in 2008.

The larger markets in Sacramento, the Bay Area and Southern California have already surpassed their previous peak values. In Redding and Shasta County, home values haven’t reached their previous 2006 peak. However, home values are projected to steadily increase going forward. Check the value of your home INSTANTLY with our industry leading Home Valuation Tool at www.reddinghomes.com/cma/property-valuation.

See all current Shasta County Listings at www.reddinghomes.com

If you have any questions regarding Shasta County real estate please feel free to contact me at 530-222-3800 or email josh@reddinghomes.com.

Have a great Spring!

Your Realtor,
Josh Barker

Posted in Josh's Blog