Dec. 12, 2018

Don’t Get Caught in the Rental Trap in 2019

Every year around this time in Shasta County, we take time to reflect and plan for next year. If you are renting your current home but have dreams of homeownership, your plan for the new year may include buying, and you wouldn’t be alone!

According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying in the next 5 years, with 38% planning to buy in the next 2 years!

When those same renters were asked why they disliked renting, 52% said that rising rental costs were their top reason, and 42% of renters believe that their rent will rise every year. The full results of the survey can be seen below:

Shasta County Real Estate Redding

It’s no wonder that rising rental costs came in as the top answer! The median asking rent price has risen steadily over the last 30 years, as you can see below!

Shasta County Real Estate Redding

There is a long-standing rule that a household should not spend more than 28% of its income on housing expenses. With nearly half of renters (48%) surveyed already spending more than that, and with their rents likely to rise again… why are they renting?

When asked why they haven’t purchased a home yet, not having enough saved for a down payment (44%) came in as the top response. The report went on to reveal that nearly half of all respondents believe that “a 20% down payment is required to buy a home.”

If the majority of those who believe they haven’t saved a large enough down payment believe that they need 20% down to buy, that means a large number of renters may be able to buy now!

Bottom Line

If you are one of the many renters who is fed up with rising rents but may be confused about what is required to buy in today’s market, let’s get together to help you on your path to homeownership. 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. 10, 2018

What If I Wait A Year to Buy a Home?

National home prices have increased by 5.4% since this time last year. Over that same time period, interest rates have remained near historic lows which has allowed many buyers to enter the market and lock in low rates.

As a seller in Shasta County, you will likely be most concerned about ‘short-term price’ – where home values are headed over the next six months. As a buyer, however, you must not be concerned about price but instead about the ‘long-term cost’ of the home.

The Mortgage Bankers Association (MBA), Freddie Mac, and Fannie Mae all project that mortgage interest rates will increase by this time next year. According to CoreLogic’s most recent Home Price Insights Report, home prices will appreciate by 4.8% over the next 12 months.

What Does This Mean as a Buyer?

If home prices appreciate by 4.8% over the next twelve months as predicted by CoreLogic, here is a simple demonstration of the impact that an increase in interest rate would have on the mortgage payment of a home selling for approximately $250,000 today:

Bottom Line

If buying a home is in your plan for this year, doing it sooner rather than later could save you thousands of dollars over the terms of your loan. 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. 7, 2018

Where Are Interest Rates Headed in 2019?

The interest rate you pay on your home mortgage in Shasta County has a direct impact on your monthly payment. The higher the rate, the greater the payment will be. That is why it is important to know where rates are headed when deciding to start your home search.

Below is a chart created using Freddie Mac’s U.S. Economic & Housing Marketing Outlook. As you can see, interest rates are projected to increase steadily throughout 2019.

How Will This Impact Your Mortgage Payment?

Depending on the amount of the loan that you secure, a half of a percent (.5%) increase in interest rate can increase your monthly mortgage payment significantly. But don’t let the prediction that rates will increase stop you from purchasing your dream home this year!

Let’s take a look at a historical view of interest rates over the last 45 years.

Bottom Line

Be thankful that you can still get a better interest rate than your older brother or sister did ten years ago, a lower rate than your parents did twenty years ago, and a better rate than your grandparents did forty years ago. 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. 5, 2018

4 Reasons to Buy A Home This Winter!

Shasta County Real Estate Redding

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

1. Prices Will Continue to Rise

CoreLogic’s latest Home Price Insight report revealed that home prices have appreciated by 5.6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.7% over the next year.

The bottom in home prices has come and gone. Home values will continue to appreciate for years. 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 hovered around 4.8%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase in 2019.

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 homes 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 build equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person building 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.

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.

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. 4, 2018

Shasta County Market Update - December 2018

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


From The Desk Of Josh Barker @ RE/MAX

Home Prices 

The average sales price for a home in the month of November was $286,000 up from $274,000 in November of last year. This overall increase in the average sales price has put many of the remaining underwater mortgages out of the red and back into positive equity positions. Although the market price for a home is clearly up over last year, home prices are still an average of 10% below the average prices of 2006 when the market was at its all-time high. Home price appreciation is expected to continue to rise in 2019 and at a slower pace than in 2018. The largest impact on this projection will be the increase in buyer demand due to "fire-related buyers" that Shasta County may receive from the Paradise area.

Shasta Home Value Redding CA

Interest Rates

Interest rates have crossed over the 5% range in the past several months and all projections point to an even higher interest rate environment in the near future. The Federal Reserve who carries the most weight in mortgage rate pricing has stated that they intend to raise the interest rate several more times in 2019, provided the economy continues to grow. As mortgage rates increase, many on the edge of being able to qualify - risk being priced out of the market which could have the largest impact on sales volume in 2019.

Home Inventory

The number of homes available for sale in Shasta County currently is hovering around 1,035 homes for sale up from 1,020 one year ago. The stability in the number of homes for sale will likely keep prices in check and prevent any major run-up in home prices. New listings coming to the market in the month of November was up by 30% compared to last November which is welcomed news for many buyers that are currently searching for a home.

Buyer Demand

Buyer demand in Shasta County is considered strong by nearly every account and with the addition of "fire-related buyers" in the market, we expect this trend to remain consistent throughout the winter months. This winter season, unlike previous winter seasons, we do not anticipate to see a significant slow down in sales volume. There are simply too many buyers in need of housing due to the fires to see our traditional seasonal slowdown.

New Construction

New construction in Shasta County is trending up. With multiple new subdivisions coming to the market, expansion of existing subdivisions, and fire related new construction, it is expected that 2019 will likely be our busiest year for new construction since 2007. The cost of new construction is also rising quickly as well. Prior to the fires, an average entry level home cost an average of approximately $150 per foot to construct. Currently, these same entry level homes can cost in excess of $185 per foot to build. We have been receiving reports of custom home construction costing in excess of $230 per foot to construct. The cost of new construction will likely become a major barrier for new home development in the future if prices are not held in check.

Instant Offers

Many online companies, as well as several local companies, are boasting of an "Instant offer solution to selling a home". Though these programs can be understandably attractive, keep in mind that no company is in the business of losing money. This means that for those who participate, it could be expected that a person could leave thousands of dollars on the table. In most cases, this program is designed to "get in the front door" and then "bait and switch" a person to a more equitable solution. In either case, this is not a recommended way to start the process of selling a home for the highest price, which in many cases is your most valuable asset.  You decide... 

 

In closing and on behalf of all of us here at Josh Barker Real Estate Advisers, thank you for all of your amazing referrals and support throughout this past year. We wish all of you a tremendous Holiday Season and a Happy New Year!

Your Realtor,

Josh Barker

 

P.S. Our office proudly participates in TOYS for TOTS each year. This year is especially important as many families have lost their homes and of course their children lost everything as well. If you would like to participate, simply drop off a new unwrapped toy at our office valued at $10.00 or more prior to December 18th, and we will make sure that it gets to a special child in need.

 

As always, if you have any questions, please feel free to respond to this email or contact me at 530-222-3800.

Posted in Josh's Blog
Nov. 28, 2018

The #1 Reason to Not Wait Until Spring to Sell Your House

Many sellers in Shasta County believe that spring is the best time to place their homes on the market because buyer demand traditionally increases at that time of year, but what they don’t realize is that if every homeowner believes the same thing, then that is when they will have the most competition!

The #1 Reason to List Your Home in the Winter Months is Less Competition!

Housing supply traditionally shrinks at this time of year, so the choices buyers have will be limited. The chart below was created using the months’ supply of listings from the National Association of Realtors.

As you can see, the ‘sweet spot’ to list your home for the most exposure naturally occurs in the late fall and winter months (November – February). 

Temperatures aren’t the only thing that heats up in the spring – so do listings!

In 2017, listings increased by nearly half a million houses from December to June. Don’t wait for these listings to come to market before you decide to list your house.

Added Bonus: Only Serious Buyers Are Out in the Winter

At this time of year, only those purchasers who are serious about buying a home will be in the marketplace. You and your family will not be bothered and inconvenienced by mere ‘lookers.’ The lookers are at the mall or online doing their holiday shopping.

Bottom Line

If you have been debating whether or not to sell your home and are curious about market conditions in your area, let’s get together to help you decide the best time to list your house for sale. 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
Nov. 19, 2018

Home Sellers in Q3 Netted $61K at Resale

According to a recent report by ATTOM Data Solutions, home sellers who sold their homes in the third quarter of 2018 benefited from rising home prices and netted an average of $61,232.

This is the highest average price gain since the second quarter of 2007 and represents a 32% return on the original purchase prices.

After the Great Recession, many homeowners were left in negative equity situations but home price appreciation in the recovery period since then has given homeowners something to smile about.

The results from ATTOM fall right in line with data from the latest edition of the National Association of Realtors’ (NAR) Profile of Home Buyers and Sellers. Below is a chart that was created using NAR’s data to show the percentage of equity that homeowners earned at the time of sale based on when they purchased their homes.

Even though those who purchased at the peak of the market netted less than those who bought before and after the peak, the good news is that there was a double-digit profit to be had! Many homeowners believe that they are still underwater which has led many of them to not even consider selling their houses.

Bottom Line

If you are curious about how much equity you’d earn if you sold your home, let’s get together to perform an equity review and determine the demand for your home in today’s 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
Nov. 8, 2018

Shasta County Market Update - November 2018

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


From The Desk Of Josh Barker @ RE/MAX

First and foremost, we want to take a moment and send our thoughts and prayers to all of those that have been impacted by the Camp Fire in the Paradise area south of Shasta County. With all the fires the North State has experienced this year, families will need all of our support more than ever this holiday season. 

Monthly Sales Report

The month of October revealed some promising numbers compared to September. Sales for the month of October finished with just over 300 homes sold compared to 284 sales in October of last year. The increase in sales compared to last year can be largely contributed to the increase of homebuyers shopping in the local market due to the CARR fire. A large number of those who lost a home to the fire have elected to purchase another home. As these home buyers solve their immediate housing needs we expect home sales will likely return to normal levels by the end of this year.

Shasta County MLS Home Sales October 2018

Interest Rates

Interest rates play a major role in overall affordability in real estate markets like ours in Shasta County. Rates have a large impact in areas like ours because the vast majority of local home buyers purchase homes with financing. As the rate goes up, the loan amount a buyer qualifies for goes down. A simple way to explain the relationship is like this...For every 1% that the interest rate increases, the loan amount a buyer qualifies for goes down by an average of 10%. Due to a strong economy including job and wage growth, the federal reserve is expected to continue to raise the interest rates in the short term.

Shasta County Mortgage

Home Prices

Home prices are up over last year with an estimated 5% growth in home values over the past year. Due to the lack of major wage or job growth, the local market has not appreciated as high as other markets throughout the state. Both the number of jobs and wages paid for jobs has an impact on how quickly home values can raise in a market like Shasta County. The forecast of home appreciation in the Shasta County market for the next 12 months is 4% according to several of the largest housing economists. Interest rates could have an impact on home appreciation and will likely be the number one factor on the accuracy of this projection. You can check the approximate value of your home instantly by clicking here.

Shasta County Home Valuation

Home Rebuilds / CARR fire

With over 1,000 residences lost in the car fire, many locals know someone impacted by the fire. One of the frequent questions we receive is "How many people are going to rebuild". Although we are a ways off from being able to determine the exact number, there are some trends that are emerging. For example:

  • Those who lost a home in locations where the cost of rebuilding is challenging due to topography--which is a large number due to the mountainous topography the fire burned through--may decide not to rebuild.
  • Those who lost a home on acreage property where the land and trees around them have been devastated may decide not to rebuild.
  • Those who were considering a move prior to the fire may decide not to rebuild.
  • Those who do not want to wait the estimated time it will take to rebuild will likely not rebuild.
  • Those who do not desire to go through the process of rebuilding will likely sell their vacant home sites.
  • Many of the vacant home sites will be purchased by local contractors, developed and resold over the next several years adding additional housing to the market.  

Although the number of people that decide not to rebuild may reach as high as 50%, this will likely not have a major impact on the housing market in the long term.

Bottom Line

Home prices have increased an average of 5% over the past 12 months. The majority of this home appreciation is focused on the $500k and below price range. Home sales for the month of October were recorded at just over 300, which is up from 284 one year ago. The next 12-month home value appreciation projection is estimated at 4%, but this number could be impacted if mortgage interest rates rise faster than wages or job growth can account for.

As always, if you have any questions, please feel free to respond to this email or contact me at 530-222-3800.

Have a great November!

Josh Barker

Posted in Newsletters
Nov. 5, 2018

Taking Fear Out of the Mortgage Process

A considerable number of potential buyers in Shasta County shy away from jumping into the real estate market due to their uncertainties about the buying process. A specific cause for concern tends to be mortgage qualification.

For many, the mortgage process can be scary, but it doesn’t have to be!

In order to qualify in today’s market, you’ll need a down payment (the average down payment on all loans last year was 5%, with many buyers putting down 3% or less), a stable income, and good credit history.

Throughout the entire home buying process, you will interact with many different professionals who will all perform necessary roles. These professionals are also valuable resources for you.

Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests to follow:

  1. Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score® of all closed loans in September was 731, according to Ellie Mae.
  2. Start gathering all of your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
  3. Contact a professional – your real estate agent will be able to recommend a loan officer who can help you develop a spending plan, as well as help you determine how much home you can afford.
  4. Consult with your lender – he or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
  5. Talk to your lender about pre-approval – a pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change) and demonstrates to home sellers that you are serious about buying!

Bottom Line

Do your research, reach out to professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner. 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
Oct. 25, 2018

Will Home Prices Continue to Increase?

There are many unsubstantiated theories about what is happening with home prices. From those who are worried that prices are falling (data shows this is untrue), to those who are concerned that prices are again approaching boom peaks because of “irrational exuberance” (this is also untrue as prices are not at peak levels when they are adjusted for inflation), there seems to be no shortage of opinion.

However, the increase in prices is easily explained by the theory of supply & demand. Whenever there is a limited supply of an item that is in high demand, prices increase. It is that simple. In real estate, it takes a six-month supply of existing salable inventory to maintain pricing stability. In most housing markets, anything less than six months will cause home values to appreciate and anything greater than seven months will cause prices to depreciate (see chart below).

According to the Existing Home Sales Report from the National Association of Realtors (NAR), the monthly inventory of homes for sale has been below six months for the last five years (see chart below).

Bottom Line

If buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should. 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