Feb. 17, 2020

The Overlooked Financial Advantages of Homeownership

There are many clear financial benefits to owning a home: increasing equity, building net worth, growing appreciation, and more. If you’re a renter, it’s never too early to make a plan for how homeownership can propel you toward a stronger future. Here’s a dive into three often-overlooked financial benefits of homeownership and how preparing for them now can steer you in the direction of greater stability, savings, and predictability.

1. You Won’t Always Have a Monthly Housing Payment

According to a recent article by the National Association of Realtors (NAR):

“If you’ve been a lifelong renter, this may sound like a foreign concept, but believe it or not, one day you won’t have a monthly housing payment. Unlike renting, you will eventually pay off your mortgage and your monthly payments will be funding other (possibly more fun) things.”

As a homeowner, someday you can eliminate the monthly payment you make on your house. That’s a huge win and a big factor in how homeownership can drive stability and savings in your life. As soon as you buy a home, your monthly housing costs will begin to work for you as forced savings, coming in the form of equity. As you build equity and grow your net worth, you can continue to reinvest those savings into your future, maybe even by buying that next dream home. The possibilities are truly endless.

2. Homeownership Is a Tax Break

One thing people who have never owned a home don’t always think about are the tax advantages of homeownership. The same piece states:

“Both the interest and property tax portion of your mortgage is a tax deduction. As long as the balance of your mortgage is less than the total price of your home, the interest is 100% deductible on your tax return.”

Whether you’re living in your first home or your fifth, it’s a huge financial advantage to have some tax relief tied to the interest you pay each year. It’s one thing you definitely don’t get when you’re renting. Be sure to work with a tax professional to get the best possible benefits on your annual return.

3. Monthly Housing Costs Are Predictable

A third item noted in the article is how monthly costs become more predictable with homeownership:

“As a homeowner, your monthly costs are most likely based on a fixed-rate mortgage, which allows you to budget your finances over a long period of time, unlike the unpredictability of renting.”

With a mortgage, you can keep your monthly housing costs steady and predictable. Rental prices have been skyrocketing since 2012, and with today’s low mortgage rates, it’s a great time to get more for your money when purchasing a home. If you want to lock-in your monthly payment at a low rate and have a solid understanding of what you’re going to spend in your mortgage payment each month, buying a home may be your best bet.

Bottom Line

If you’re ready to start feeling the benefits of stability, savings, and predictability that come with owning a home, let’s get together to determine if buying a home sooner rather than later is right for you. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
Feb. 10, 2020

How Pricing Your Home Right Makes a Big Difference

Even though there’s a big buyer demand for homes in today’s low inventory market, it doesn’t mean you should price your home as high as the sky when you’re ready to sell. Here’s why making sure you price it right is key to driving the best price for the sale.

If you’ve ever watched the show “The Price Is Right,” you know the only way to win the game is to be the one to correctly guess the price of the item up for bid without going over. That means your guess must be just slightly under the retail price.

When it comes to pricing your home, setting it at or slightly below market value will increase the visibility of your listing and drive more buyers your way. This strategy actually increases the number of buyers who will see your home in their search process. Why? When potential buyers look at your listing and see a great price for a fantastic home, they’re probably going to want to take a closer look. This means more buyers are going to be excited about your house and more apt to make an offer.

When this happens, you’re more likely to set up a scenario with multiple offers, potential bidding wars, and the ability to drive a higher final sale price. At the end of the day, even when inventory is tight, pricing it right – or pricing it to sell immediately – makes a big difference.

Here’s the other thing: homeowners who make the mistake of overpricing their homes will eventually have to lower the prices anyway after they sit on the market for an extended period of time. This leaves buyers wondering if the price drops were caused by something wrong with these homes when in reality, nothing was wrong, the initial prices were just too high.

Bottom Line

If you’re thinking about selling your home this year, let’s get together so you have a professional on your side to help you properly price your home and maximize demand from the start. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
Feb. 3, 2020

Shasta County Market Update - February 2020

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


From the Desk Of Josh Barker @ RE/MAX

Real Estate in 2020 is off to a strong start. Low-interest rates, combined with a strong economy, are contributing to healthy buyer demand. This month we will quickly review some of the hottest topics trending now. As always, if you have any additional questions feel free to contact me at the office at 530-222-3800 or by email at josh@reddinghomes.com. Have a great February! 

Home Inventory

The number of housing units currently for sale is 824. This is down from 960 in the same period last year. We expect the inventory of homes for sale to climb as we transition to spring. For those that plan to sell this spring, we believe the sooner the better, as there will be less competition. 

Home Sales

The number of housing units sold in January finished at 213. This is down from 240 in the same period last year. The average sales price in January was $301,907. This is up from $289,780 in the same period one year ago. The largest contributing factor was the lack of inventory in the below $250,000 price range. 

Home Construction

New construction is on the rise in Shasta County and many of these new homes will be priced between the $350,000-$500,000 price range. The absence of new construction in  $250,000 and below price range means we will continue to experience low inventories and shorter market times for these types of properties. 

Buyer Demand

The amount of "online search activity" currently suggests that buyer demand will be very strong in the first quarter of this year. Typically, our local market experiences an increase in buyer demand in the spring and peaks in mid-summer. Current data suggests that the selling season may start a little earlier in 2020. Lower than anticipated interest rates, combined with a strong economy and housing market is driving buyer demand.

Rental Market

The rental market in Shasta County has continued to remain strong. The vacancy rate is low and rents are climbing. There are multiple high-density developments coming to market this year but will still fall short of the numbers necessary to keep rents in check.

Interest Rates

A continuation of lower-than-anticipated interest rates is driving the housing market. However, these low rates are serving as camouflage for housing affordability. If rates go up as little as 1%, the purchasing power for the average home buyer diminishes by nearly 10%. Fortunately, we do not expect to see major increases in interest rates in the near future.

Home Price Expectations

As more millennials participate in homeownership and take advantage of today's low-interest rates, demand will continue to strip away at supply. Supply will be hit the hardest in the $275,000 and below price ranges. For this reason, we expect the most appreciation in this price segment. New construction begins to pick up steam above $300,000 in Shasta County and for this reason, appreciation is expected to be slower as the price of a home increases.

Learn more about Josh Barkers 5 proven steps to selling your home by visiting 

reddinghomes.com/selling-your-home/ 

Learn more about Josh Barker's proven ideal investment formula by visiting

reddinghomes.com/buying-home/

Check the average value for your home instantly by visiting reddinghomes.com/cma/property-valuation/

 

Make it a great day!

Josh Barker

P.S. You can view all of our past real estate market updates by visiting www.reddinghomes.com/blog

Posted in Josh's Blog
Jan. 27, 2020

The #1 Reason It Is Difficult to Find Your Dream Home

 

The headlines in real estate today all revolve around one major point: there is a shortage of homes available for sale. Price appreciation is accelerating again because there is a shortage of homes available for sale. First-time buyers are taking longer to purchase a home because there is a shortage of homes available for sale in the lower price points. Boomers are staying in their current homes longer because there is a shortage of homes available for sale to which they would move. In certain markets, affordability is becoming more challenging because there is a shortage of homes available for sale.

What’s the major reason for this lack of housing inventory?

The issue was examined in a recent article by the National Home Builders Association (NAHB). In the article, Robert Dietz, Chief Economist for NAHB, explained:

“Home building in the 2010s was a story of the Long Recovery. After the Great Recession, the number of home builders declined significantly, and housing production was unable to meet buyer demand…Years of population and household formation growth, combined with relatively reduced levels of home building, have left the market with a critical supply shortage.”

Here are the single-family home construction starts by decade for the last six decades:

Obviously, there’s a current shortage of homes for sale because not enough houses were built over the last ten years. To add to the challenge, the U.S. population expanded by more than 20 million people during the 2010s.

Below is a graph showing the number of starts per every million in population. The last decade shows that starts per population were less than half the average of the previous five decades.

There’s good news coming!

The NAHB article explains that there is light at the end of the tunnel.

How confident home builders are in the housing market is a great indicator of how much building is about to get started. The NAHB/Wells Fargo Housing Market Index (HMI) gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair,” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average,” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as “good” than “poor.”

Here are the HMI readings going back to 2008:

The 2019 confidence reading of 76 was the highest since 1999. The January 2020 index came in one point lower at 75. These readings indicate we should see an increase in new residential construction in 2020. Just last week, NAHB Chairman Greg Ugalde stated:

“Low interest rates and a healthy labor market combined with a need for additional inventory are setting the stage for further home building gains in 2020.”

The increase in housing starts has already begun. According to the January report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, single‐family housing starts were up 11.2% and attained the highest level in thirteen years.

Bottom Line

Whether you’re a first-time buyer or a seller thinking of moving up or down, 2020 could be your year with more new construction homes coming to market. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com

Posted in Josh's Blog
Jan. 20, 2020

Housing Inventory Vanishing: What Is the Impact on You?

The real estate market is expected to do very well this year as mortgage rates remain at historic lows. One challenge to the housing industry is the lack of homes available for sale. Last week, move.com released a report showing that 2020 is beginning with the lowest available housing inventory in two years. The report explains:

“Last month saw the largest year-over-year decline of housing inventory in almost three years with a dramatic 12 percent decline, pushing the number of homes for sale in the U.S. to the lowest level since January 2018.”

The report also revealed that the decline in inventory stretches across all price points, as shown in the following graph:

George Ratiu, Senior Economist at realtor.com, explains how this drop in available homes for sale comes at a time when more buyers are expected to enter the market:

“The market is struggling with a large housing undersupply just as 4.8 million millennials are reaching 30-years of age in 2020, a prime age for many to purchase their first home. The significant inventory drop…is a harbinger of the continuing imbalance expected to plague this year’s markets, as the number of homes for sale are poised to reach historically low levels.”

The question is: What does this mean to you?

If You’re a Buyer…

Be patient during your home search. It may take time to find a home you love. Once you do, however, be ready to move forward quickly. Get pre-approved for a mortgage, be ready to make a competitive offer from the start, and understand that a shortage in inventory could lead to the resurgence of bidding wars. Calculate just how far you’re willing to go to secure a home, if you truly love it.

If You’re a Seller…

Realize that, in some ways, you’re in the driver’s seat. When there is a shortage of an item at the same time there is a strong demand for that item, the seller of that item is in a good position to negotiate. Whether it is price, moving date, possible repairs, or anything else, you’ll be able to demand more from a potential purchaser at a time like this – especially if you have multiple interested buyers. Don’t be unreasonable, but understand you probably have the upper hand.

Bottom Line

The housing market will remain strong throughout 2020. Understand what that means to you, whether you’re buying, selling, or doing both. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com

Posted in Josh's Blog
Jan. 13, 2020

Buying a Home Early Can Significantly Increase Future Wealth

According to an Urban Institute study, homeowners who purchase a house before age 35 are better prepared for retirement at age 60.

The good news is, our younger generations are strong believers in homeownership.

According to a Freddie Mac survey,

“The dream of homeownership is alive and well within “Generation Z,” the demographic cohort following Millennials.

Our survey…finds that Gen Z views homeownership as an important goal. They estimate that they will attain this goal by the time they turn 30 years old, three years younger than the current median homebuying age (33).”

If these aspiring homeowners purchase at an early age, the Urban Institute study shows the impact it can have.

Based on this data, those who purchased their first homes when they were younger than 25 had an average of $10,000 left on their mortgage at age 60. The 50% of buyers who purchased in their mid-20s and early-30s had close to $50,000 left, but traditionally purchased more expensive homes.

Although the vast majority of Gen Zers want to own a home and are somewhat confident in their future, “In terms of financial awareness, 65% of Gen Z respondents report that they are not confident in their knowledge of the mortgage process.”

Bottom Line

As the numbers show, you’re not alone. If you want to buy this year but you’re not sure where to start the process, let’s get together to help you understand the best steps to take from here. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
Jan. 6, 2020

Shasta County Market Update - January 2020

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


From the Desk Of Josh Barker @ RE/MAX

Happy New Year!

The year 2020 promises to bring some exciting changes to the local Shasta County Real Estate market. There are a number of new projects underway at the county and city levels. In addition, new subdivisions are popping up throughout the county and the larger economy is operating on all cylinders. We live in a beautiful part of California with majestic mountains, eye-catching lakes, and home prices that are nearly half the cost in comparison to the rest of the state. A friend of mine said to me recently "Let's make this the roaring 20's of our community." I like that idea!

Home Sales for the Year

First, home sales for 2019 finished at 3,236. This is down from 3,326 sold the year before. This 2% change is barely noticeable and largely affected by the absence of fire-related purchases compared to 2018. Next, The average sales price for the year was $303,500. This is up from an average of $287,300 in the year 2018. Finally, the median days it took for a home to sell in 2019 was 72 days. This number was identical to 2018.

Listings Taken for the Year

The total homes listed for sale in 2019 finished at 5,354. This is down from 5,598 in 2018. The 4% reduction in listings coming to the market in 2019 was largely due to the fact that additional home sellers decided to list their homes in the final months of 2018. This was due to added demand related to the local fires of 2018.

What to Expect in 2020

Nearly all economic factors point towards a very strong economy in 2020. The stock market is performing very well and jobs are at an all-time high. These factors, among others, are pumping more liquidity into the real estate market and will likely contribute to prices rising.

New construction is on the rise in Shasta County and is expected to reach its highest level in more than 10 years. After a rise in the overall cost of construction, largely due to fire-related rebuilds, building costs are expected to drop slightly throughout the course of the year.

Interest rates have remained at or below 4% for the last several years. We expect to see little change in 2020. If the stock market gets really hot, we expect to see rates bump slightly in an attempt to make the bond market more attractive to investors.

The number of home sales in 2020 is expected to remain consistent, compared to 2019, and is estimated at 3,250. The largest challenge to higher sales volumes in our local market is population growth, which is expected to remain slow.

Home prices are expected to rise slightly in 2020 due to a strong economy, family formation, and more millennials entering homeownership for the first time. We expect the lower price ranges of the Shasta County housing market to appreciate the most with the upper-end market receiving the slowest appreciation.

Thinking about selling your home in 2020? The price you set on your home, the condition your home is presented in, and how your home is marketed can make all the difference. With over 20 years of experience, and more than 5,000 homes sold, we have developed a proven plan that is customized to meet your unique needs.

Have questions? Feel free to contact me directly at 530-222-3800 or learn more by visiting reddinghomes.com/selling-your-home/

Check the average value for your home instantly by visiting reddinghomes.com/cma/property-valuation/

Have a great start to your year!

Josh Barker

P.S. You can view all of our past real estate market updates by visiting www.reddinghomes.com/blog

Posted in Josh's Blog
Dec. 27, 2019

2020 Forecast Shows Continued Home Price Appreciation

Questions continue to rise around where home prices will head in 2020. The latest forecast from CoreLogic shows continued appreciation at 5.4% over the next year:

Additionally, ARCH Mortgage Insurance Company in their current Housing and Mortgage Market Review revealed their latest ARCH Risk Index, which estimates the probability of home prices being lower in two years. Based on the most recent results, 32 of the 50 U.S. states (plus D.C.) had a minimal probability of lowering by 2021.

Bottom Line

Experts forecast home price appreciation to continue at a moderate rate as we move through 2020 and beyond. With appreciation growing, let’s get together and plan for your next move. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com

Posted in Josh's Blog
Dec. 17, 2019

3 Mistakes to Avoid When Selling a Home in 2020

It’s exciting to put a house on the market and to think about making new memories in new spaces, but we can have deep sentimental attachments to the homes we’re leaving behind, too. Growing emotions can help or hinder a sale, depending on how we manage them.

When it comes to the bottom line, homeowners need to know what it takes to avoid costly mistakes. Being mindful of these things and prepared for the process can help you avoid some of the most common mishaps when selling your house.

1. Overpricing Your Home

When inventory is low, like it is in the current market, it’s common to think buyers will pay whatever we ask for when we price our homes. Believe it or not, that’s far from the truth. Don’t forget that the buyer’s bank will send an appraisal to determine the fair value for your home. The bank will not lend more than what the house is worth, so be mindful that you might need to renegotiate the price after the appraisal. A real estate professional will help you to set the true value of your home.

2. Letting Your Emotions Interfere with the Sale

Today, most homeowners have been living in their houses for an average of 10 years (as shown in the graph below):

This is several years longer than what used to be the norm, since many homeowners have been recouping from negative equity situations over the past 10 years. The side effect, however, is when you live for so long in one place, you may get even more emotionally attached to your space. If it’s the first home you bought after you got married or the house where your children grew up, it very likely means something extra special to you. Every room has memories and it’s hard to detach from the sentimental value.

For some homeowners, that makes it even harder to negotiate, separating the emotional value of the home from the fair market price. That’s why you need a real estate professional to help you with the negotiations in the process.

3. Not Staging Your Home

We’re generally quite proud of our décor and how we’ve customized our houses to make them our own personalized homes, but not all buyers will feel the same way about your design. That’s why it’s so important to make sure you stage your home with the buyer in mind. Buyers want to envision themselves in the space, so it truly feels like their own. They need to see themselves in the space with their furniture and keepsakes – not your pictures and decorations. Stage and declutter your home so they can visualize their own dreams as they walk through your house. A real estate professional can help you with tips to get your home ready to stage and sell.

Bottom Line

Today’s seller’s market might be your best chance to make a move. If you’re considering selling your house, let’s get together to help you navigate through the process while avoiding common seller mistakes. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
Dec. 9, 2019

Is A Bigger House Within Your Budget?

At this time of year, many families come together to celebrate the season. It’s also the time when many realize their homes are just not quite big enough to host all of their guests and loved ones. Are you one of those homeowners dreaming for a larger space to call home?

You may have enough equity in your current home to move up.

According to the Q3 2019 U.S. Home Equity & Underwater Report by ATTOM Data Solutions,

“14.4 million residential properties in the United States were considered equity rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value.”

This means that one in four of the 54 million mortgaged homes in the U.S. has at least 50% equity. If these homeowners decide to sell, they can use their equity to put toward the purchase of a new home. Maybe you’ll be one of them.

NAR recently released their 2019 Profile of Home Buyers and Sellers showing that,

“This year, home sellers cited that they sold their homes for a median of $60,000 more than they purchased it, up from $55,500 the year prior. This accounted for a 31 percent price gain, up from 29 percent the year before.”

Here’s the equity gain breakdown based on the number of years these sellers lived in their homes

Bottom Line

If you’re one of the many homeowners with big dreams of owning a larger home, let’s get together. Working with a trusted advisor to find out how much equity you have is a great first step in putting your move-up plan in motion. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com

Posted in Josh's Blog