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.
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 firstname.lastname@example.org
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.
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.
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 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 email@example.com.
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 firstname.lastname@example.org 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
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.
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.
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.
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.
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 email@example.com with any questions you have regarding the Shasta County Real Estate Market.
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.
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.
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 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.
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 firstname.lastname@example.org.
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.
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.
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.
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
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.
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.
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.
December 5, 2015 From the first day to the last the whole process went AWESOME!!! Buying a home can be very stressful but JOsh Barker's team was always there to make sure things went smoothly!!! If you find yourself in the market to buy or sell I feel you won't go wrong with this professional team. Thanks for helping my wife and I. God Bless! -Howie Groen
December 4, 2015 I was impressed when I met with Josh to sell our home. He made lots of promises on his service, was extremely knowledgeable. Once we started the sales process, he delivered on everything he told us he would do. He and his staff are amazing. They keep regular contact with you from start to finish. The are prompt in any situation that arises. They made the stress of selling a home so much easier. I would recommend Josh Barker to anyone that is selling their home. Deborah & John MacGillivray
November 30, 2015 Very easy to work with. Our home sold in 10 days! Kept us informed from start to finish! Staff was always friendly and informative. You will not regret choosing Josh Barker for your realtor. Josh also recommended a wonderful window cleaner and carpet cleaner. We even sold our home for more then asking price! -Bruce and Lynn S.
November 20, 2015 Josh Barker and his associates are simply the best! I've bought and sold 4 houses, using different realtors for each transactions. But I will only go with Josh Barker for all my future real estate needs! He is very knowledgeable, friendly, and prompt. He got our house sold for top dollar in just a few weeks. Thanks for everything! -Jennifer A.
November 13, 2015 We were very happy with the service and knowledge that Josh Barker and his team brought to the table in our real estate negotiations. We are confident that with out Josh we would have paid significantly more for the property, would not have been as well informed regarding the property and then tenants therein, and that this would have been a different transaction all together. Even after the close of escrow Josh and his team have continued to help us out with questions to the former owner. We heartily recommend Josh for all of our real estate needs. Alan K.
November 10, 2015 I have rarely had the pleasure to do business with such a team of professionals. Josh met with me personally to explain how the members of his staff would work together with my wife and I to come to a successful conclusion in the sale of our home. Each member of this organization had specific responsibilities in the sale process, and each and everyone did their job to perfection. It is gratifying to find a group of people that are so dedicated to their clients. I heartily recommend Josh Barker for all your Real Estate needs. -Gordy S.
November 9, 2015 Josh came highly recommended and it was clear right away that he has a high level of expertise and professionalism in his field. He was very attentive to our needs, detail oriented and knows the local market quite well. His online strategy of showing our home and getting the most quality views possible was definitely encouraging and exciting! He has assembled a quality, friendly and professional staff who helped make our home selling experience an easy and smooth one. There is no doubt that we will be using Josh and his tea for our future real estate ventures. It was a joy to work with them!!- Paul M.
November 9, 2015 Josh Barker and his entire team are amazing! They are on the ball every minute and they don't miss a beat. They treat us so well that they feel like family. We will never choose anyone else for our real estate needs! Josh gets your home sold asap! Couldn't be happier! -Jennifer M.
November 3, 2015 Josh has my highest recommendation. Our home was listed for 6 months with no offers. We retained Josh and thanks to his knowledge, exposure to many websites and his expertise, within weeks we received multiple offers. The great thing about Josh and his team, is you have the personal attention of having a small town real estate agent, like a friend, but the talent and professionalism and knowledge of a big city Broker combined into one, that is rare! If you want your home sold, call Josh and his team, they are a delight to work with. -Sara C.
November 2, 2015 To Josh Barker and his team, I cannot thank you enough for all your hard work and dedication in selling my home. You and your team were professional, knowledgeable and responsive throughout the whole transaction. Josh, I always felt you had my best interest at heart and you made a potentially difficult process extremely easy. From start to finish the service I received was nothing short of excellent. I will definitely be referring anyone I know looking to buy or sell a home because you are without a doubt the best realtor I know!
October 30, 2015
Josh Barker and his team are by far the most professional Real Estate Company in the North State. We have used Josh Barker on multiple house buying and selling transactions. Not only does Josh listen attentively, but he sincerely cares about helping you find the exact house that fits your lifestyle/needs. He is a fair negotiator and you can fully trust that he will give you accurate advice and information from all angles. His staff is prompt, friendly, and they have excellent and timely follow through both on the phone and via email. Josh and his staff keep you updated along the way and you never have to worry about them forgetting any detail. Josh Barker is second to none! Whether you are listing or selling, Josh Barker will make sure you are taken care of 100%. -Alana O.
October 29, 2015 Josh Barker has an incredible team that makes his office a huge success. When I had a questions or a need, it was answered promptly and cordially by one of the team members. This office will go above and beyond what is considered "normal practices" to make the process of buying or selling a home a breeze. Through excellent negotiations, we were able to sell our home for our asking price within one wee! This office has been a part of my life for the past 7 weeks and will be sorely missed. -Marty and Sharl L.
October 21, 2015 I would like to give a huge thank you to Josh Barker and his entire company for helping me with my recent home purchase. It is clear that Josh is passionate about what he does and extremely knowledgeable. Finding the right home felt stressful at times but Josh was always available for all of my questions. The entire company went above and beyond throughout the whole process. Josh has sold several homes for my family and friends with great success so working with Josh was an easy decision. -Brian M.
October 20, 2015 I have already recommend Josh Barker to several friends. His office was extremely professional, punctual, informative and helped us quickly sell our home for a great price. Thank you Josh and team! -April L.
October 14, 2015 From the beginning of the process to the end, Josh and his team were exemplary. Each team member knew their job and handled it with nothing but true professionalism. I will definitely recommend Josh and his team to my friends and family
October 8, 2015 It was both a professional blessing and an honor to have worked with Josh Barker and his team. When it came time to sell our house, a dear friend highly recommended Josh Barker. Following his advice, we called Josh. First impressions go along way, he was very impressive as well as very professional. Josh certainly did his homework determining the financial specifications of the housing market in our neighborhood. It was quite evident that the Lord was working through Josh. When God is for us, who can be against us. Trust in the Lord with all your heart, lean not on your own understanding, acknowledge Him in all your ways and He will make your paths straight. To that end, I would highly recommend services of Josh Barker Realty, only wish I had another house to sell. God Bless. -Phil and Diane Richardson
September 28, 2015 Josh (and his team of professionals) was outstanding! We were very impressed with the communication throughout the process of listing and closing the sale of our duplex in Redding...and we live in Santa Rosa!! Josh's insight, knowledge and personal attention was much appreciated. We would very definitely recommend Josh with no doubt or hesitation. -Bob and Fiona V.
September 14, 2015 We were so pleased with the service provided by Josh and his team. We interviewed three realtors prior to signing with Josh and selected him based upon his knowledge of the market and strategy for promoting the property both locally and outside Shasta County. Josh emphasized his team approach and communications with his clients. The house sold in seven days and escrow went without a hitch. I've bought and sold 10 properties and this transaction was by far the most seamless. Thanks Josh and your team of professionals! -John and Christina B.
September 11, 2015 Over the past 3 years, we have utilized Josh's outstanding services to sell 2 homes and purchase another. Josh is the consummate professional who truly has his clients best interest at heart. In addition, Josh has built an amazing team of real estate professionals who made themselves available through our transaction process. When it comes to real estate, my wife and I are confident that Josh and his team will always be our first call. -Richard M.
September 11, 2015 Buying and selling a home is not just a transaction, it is your life, your family, your fiances and so much more. We have used Josh and his crew on 3 occasions now and have come to know and love them like family. If you are looking for an honest and ethical realtor Josh Barker should be your first and only phone call. We are proud to call him our realtor and our friend. -Mike and Jenny C.
August 21, 2015 The professionalism of Josh Barker and his staff far exceeded any of my expectations. It was the most pleasant experience I have encountered during a transitional period, when change can be so overwhelming. I never doubted that everything was being fully handled on my behalf for the best outcome for me! (And that is saying a lot!). Everyone was knowledgeable, courteous, and communicated so well. I highly trust Josh and feel that he knew the outcome I wanted and made sure that was what occurred. Thank you Josh and Team! -Sharen V.