April 16, 2019

Home Buyer Demand Will Be Strong for Years to Come

There has been a lot written about millennials and their preference to live in city centers above their favorite pizza place. Some have even gone so far as to say that millennials are a “Renter-Generation”.

And while this might be true for some millennials, more and more research has surfaced that shows for the vast majority, owning a home is a major part of their American Dream!

New research shows that 66% of millennials who currently rent are determined to buy a home! Seventy-three percent of those surveyed by Pulsenomics plan to buy a home in the next five years, with 40% planning to do so within the next two years!

“Millennials want to own a home as much as prior generations,” Ali Wolf, Director of Economic Research at Meyers Research says. “We saw millennial shoppers scooping up homes in 2018—and 2019 will be no different.”

Bottom Line

Are you one of the millions of renters who are ready and willing to buy a home? Let’s get together to determine your ability to buy now! 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
April 9, 2019

3 Graphs that Show What You Need to Know About Today’s Real Estate Market

The Housing Market has been a hot-topic in the news lately. Depending on which media outlet you watch, it can start to be a bit confusing to understand what’s really going on with interest rates and home prices!

The best way to show what’s really going on in today’s real estate market is to go straight to the data! We put together the following three graphs along with a quote from Chief Economists that have their finger on the pulse of what each graph illustrates.

Interest Rates:

“The real estate market is thawing in response to the sustained decline in mortgage rates and rebound in consumer confidence – two of the most important drivers of home sales. Rising sales demand coupled with more inventory than previous spring seasons suggests that the housing market is in the early stages of regaining momentum.” – Sam Khater, Chief Economist at Freddie Mac

Income:

“A powerful combination of lower mortgage rates, more inventory, rising income and higher consumer confidence is driving the sales rebound.” – Lawrence Yun, Chief Economist at NAR

Home Prices:

“Price growth has been too strong for several years, fueled in part by abnormally low interest rates. A mild deceleration in home sales and Home Price Index growth is actually healthy, because it will calm excessive price growth — which has pushed many markets, particularly in the West, into overvalued territory.” – Ralph DeFranco, Global Chief Economist at Arch Capital Services Inc.

Bottom Line

These three graphs indicate good news for the spring housing market! Interest rates are low, income is rising, and home prices have experienced mild deceleration over the last 9 months. If you are considering buying a home or selling your house, let’s get together to chat about our 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
April 5, 2019

Shasta County Market Update - April 2019

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


From the Desk Of Josh Barker @ RE/MAX

After years of demand stripping away at the existing supply of homes for sale, left over from the major housing crises, we are finally experiencing a balanced housing market. The current inventory of homes for sale is tightening and creating an opportunity for new construction to take place at meaningful levels. The increase in new home inventory will provide a new opportunity for existing homeowners to move up and in turn, provide more desirable resale homes for many other buyers. With that said, let's dive into some of the hottest topics trending now in your local housing market.

Homes Sold Report
Home Sales for the month of March totaled 286 up from 246 12 months ago. This increase in sales is a good indicator of overall buyer demand. As you can see in the graph below, the majority of homes sales are concentrated in the below 600k price range. This should come as little surprise considering the average sales price in the market is currently $293k up from $262k 12 months ago.

 

 

New Listing Report
New listings coming to the market in the month of March was 358 down from 437 just 12 months ago. The reduction in new listings coming to the market is likely due in part to the unusually high number of days of rain in the month of March. The overall inventory of listings available for sale is also down by 11% compared to just 12 months ago. This reduction of listing inventory is shortening the market times for existing home sellers in the lower price ranges and is making the home search for buyers more challenging compared to one year ago.

 

 

New Construction
As of the end of February, new construction permits are up over 70% compared to last year. The increase in building permits is largely due to the reconstruction of homes damaged or lost due to last years CARR fire. In addition, several of the more popular new home subdivisions currently under development are performing well and builders are cautiously optimistic about overall demand 2019. The largest challenge facing the majority of local home builders is keeping the cost of construction down. As demand for labor is tapped it can push the price of construction higher. It is a balancing act for many builders as they navigate the cost of construction and their ability to provide new home inventory at affordable prices. 

You can search new homes for sale by clicking here

 

 
Interest Rates
Interest rates are likely the best news to report on in the month of April. Currently, 30 year fixed mortgages are averaging just above 4%. This is excellent news for home buyers as they can secure financing on homes at a lower payment than what was available just a few months prior. These lower rates are also catching the eye of many existing homeowners as well, causing an increase in demand for refinancing.  

 

 

Home Price Expectations
Home price expectations are always a challenging topic. In most cases, supply and demand dictate the overall home price expectations. When supply is low, which it currently is, down 11% over last year...and demand is high, which it currently is up 16% over last year, you could expect home prices to increase. Based on current data and the overall interest rate environment, we are expecting home prices to increase overall. The lower end market will appreciate the most due to the concentration of demand and begin to taper off at the mid 500k range. 

 

You can check the general value of your home instantly by visiting www.shastahomevalue.com

Your Realtor,
Josh Barker

Posted in Newsletters
March 25, 2019

Do 46 Million Millennials Know They Are Mortgage Ready?

Many have written about the millennial generation and whether or not they, as a whole, believe in homeownership as part of attaining the American Dream.

Millennials have taken longer to obtain traditional milestones than the generations before them, such as getting married, having kids, and buying a home. However, that does not mean that they do not still aspire to achieve those things.

History shows that people tend to buy their first home around age 30. Nearly 5 million millennials will turn 30 in the next two years. This will continue to fuel demand for housing.

This is also one of the many reasons why the millennial homeownership rate has continued to grow over the past few years. 48.4% of Americans between the ages of 30-34 now own a home.

There are over 46 million millennials (33% of the generation) who are considered “Mortgage Ready”, meaning they meet the qualifications to be approved for a mortgage today!

  • a FICO Score ≥ 620
  • a Back-End Debt to Income Ratio ≤ 25%
  • no Foreclosures or Bankruptcies in the last 7 years
  • no severe delinquencies in 1 year

Rob Chrane, CEO of Down Payment Resource, commented on the findings of the report,

“We now know there are millions of buyers with the income & credit necessary to qualify to buy a home. The biggest question is:

Do they know it? …Unfortunately, many renters don’t investigate homeownership simply because they don’t believe it’s an option.”

The good news is that more and more millennials are realizing that they can afford a home now. Even so, more can be done to increase awareness of low down payment programs to attract even more of this generation.

New data from realtor.com shows that in December, millennials accounted for 42% of all new home loans originated in the month. This is more than any other generation.

Bottom Line

If you are one of the many millennials who may be “Mortgage Ready” but are unsure what your next steps should be, let’s get together to help guide 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
March 19, 2019

What Credit Score Do You Need To Buy A House?

There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!

Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:

  • 16% Very Poor (300-579)
  • 18% Fair (580-669)
  • 21% Good (670-739)
  • 25% Very Good (740-799)
  • 20% Exceptional (800-850)

Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,

“Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”

There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640. Veterans Affairs (VA) loans have no credit score requirement.

As you can see, none of them are above 700!

It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:

As you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!

One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.

FICO® reported,

“Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”

Here is the increase in the average US FICO® Score over the same period of time as the graph earlier.

Bottom Line

At least 84% of Americans have a score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream! 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
March 14, 2019

4 Reasons to Buy a Home in the Spring

Spring has sprung, and it’s a great time to buy a home! Here are four reasons to consider buying today instead of waiting.

1. Prices Will Continue to Rise

CoreLogic’s latest U.S. Home Price Insights reports that home prices have appreciated by 4.4% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 4.6% over the next year.

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 fixed rate mortgage came in at 4.41% last week. 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 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

Some renters 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?

Examine 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, greater safety for your family, or you just want to have control over renovations, now could be the time to buy.

Bottom Line

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
March 5, 2019

Shasta County Market Update - March 2019

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


From The Desk Of Josh Barker @ RE/MAX

After a colder and wetter than normal February, many local residents are ready for the sunshine. February brought snow and storms that have broken a few records (and a few trees) and certainly had an impact on the local real estate market. This month we will review some of the hottest topics trending now in our local market. If you have any questions feel free to contact me at 530-222-3800.

The sold report for the month of February revealed that 197 residential properties closed escrow compared to 204 properties sold in the prior 12 months. These numbers reveal that sales are very consistent year over year. However, there has been a noticeable drop in home sales over $400k. In February there were only 22 sales in the $400k - $500k price range, and only 2 sales between $500k and $600k. This steep drop off in sales over 500k clearly states that the vast majority of sales in the local market are concentrated under 500k. Homes continue to sell in the upper end at a much slower pace. Price, condition, and marketing are critical factors in the upper-end market. You can view our plan for selling homes by visiting www.reddinghomes.com/selling-your-home

The Active homes for sale report is a great report for reviewing the overall supply of homes for sale by price range in the local market. Currently, there are 902 residential properties for sale compared to 913 one year prior. These numbers reveal that our active listing inventory is very stable compared to last year. Homes priced under 200k have been impacted most in this report with inventory of homes for sale being down by over 30% on average compared to one year ago. This could pose a challenge for many entry-level buyers where affordability is the biggest factor. You can view homes for sale by visiting www.joshbarker.com.

The new listing report is an excellent report for tracking the number of homes that come to the market sale in a single month. In the month of February, new listings that came to the market totaled 294 compared to 385 one year ago. This reduction in new listings coming to the market is likely due to the fact that we experienced record-breaking storms that prevented many "would be sellers" from listing their homes. For this reason, we expect an increase in homes coming to the market in the months of March and April compared to last year. Good news for many buyers that are currently searching for a new home. You can check the value of your home instantly by visiting www.shastahomevalue.com

Bottom Line

The local market is trending very similar to last year. Interest rates have remained under 5% and buyer demand has remained strong. New listings to the market are down compared to last year and are projected to pick up at a faster pace as the weather improves.

As always, if you have any additional questions, please feel free to respond to this email or contact me directly at the office at 530-222-3800. I hope that all of you have a great March!

 

Your Realtor,

Josh Barker

Posted in Newsletters
Feb. 27, 2019

What to Know About Zillow and Trulia

Zillow and Trulia have become more popular over the past several years. Both of these websites provide statistical data and estimates of value for homes.

The largest challenge for both of these sites is the accuracy of the information. Typically these sites pull radius data. In other words, the sites zoom out and pull other sales in the area. This becomes a challenge when neighborhoods are very different within a small radius. A prime example of this is when a large high scale neighborhood is right next to an older small entry level neighborhood. When this happens, non-comparable sales sneak into the analysis, and, often times, an inaccurate assessment is a result.

I feel that Zillow and Trulia have a great service to offer. The information is both informative and valid for creating a picture of what the housing market looks like. I don’t believe that these sites are even trying to create a perfect home value assessment. For this reason, buyers and sellers should not rely or depend on them to determine actual value, but instead, use them to determine a potential general value.

As sellers, it is important to consider what determines the value to the buyer. The neighborhood, curb appeal, floor plan, cleanliness of the home, and layout of the property are all very important factors to buyers and cannot be properly assessed by the Zillows or Trulias of the world accurately. The best pricing strategies have always come after having access to other homes for sale and comparing the features and benefits of the homes for sale with the home you want to sell. I always make it a point to preview the competition prior to listing a home in order to assist the seller in pricing competitively while maximizing the price and minimizing the time on the market.

Buyers looking at Zillow and Trulia should consider all the points mentioned above prior to purchasing. Don’t be scared when you look up a home you want to purchase on Zillow or Trulia and the value is lower or higher than the price you offered or purchased for. To get a more accurate assessment, have your agent provide comparable sales date, based on homes like yours. You will probably find that it is more valid and accurate than conducting Zillow or Trulia searches.

I will close with one thought. Let’s imagine you went to the Doctor with a major illness. Would you want the Doctor to treat you based on statistical data that may be accurate occasionally, or would you prefer that the Doctor design a plan based on your personal body or situation? Hmmmm….Why would your home be any different?

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.

Make it a great day!

Posted in Josh's Blog
Feb. 26, 2019

Why A Normal Market is Just What We Need

The housing market has been hot for a while now. Homes have been flying off the shelves as fast as they have been listed. Buyers have been competing in bidding wars just to find a home to buy, let alone find their dream home.

This ‘seller’s market’ has driven home prices to new heights. Home price appreciation averaged over 6% across the country.

However, home price growth has recently started to cool down. The latest report from CoreLogic shows that home prices have only risen by 4.7% over the last 12 months.

Many buyers and sellers planning to enter the housing market this year have started to wonder if we are headed towards another housing crash. Ralph McLaughlin, Deputy Chief Economist at CoreLogic, recently stated in an interview,

“There’s no reason to panic right now, even if we may be headed for a recession. We’re seeing a cooling of the housing market, but nothing that indicates a crash.

The real elephant in the room here is housing supply.”

The simple answer is we are returning to a ‘normal’ market. The inventory of homes for sale more closely matches the demand in the market. The added supply means fewer buyers are outbidding each other. Therefore, prices are experiencing less upward pressure. McLaughlin went on to explain,

“If there are a lot of homes on the market and suddenly no one wants to buy them, you’ll get into a downward spiral of price competition. Right now, however, we’re in the opposite situation, there isn’t an over-abundance of homes on the market.”

As more renters looking for their piece of the American Dream enter the housing market, demand for housing will continue to grow. The Joint Center for Housing Studies at Harvard University estimates over 30 million new households will enter the market from now through 2040.

“There’s the natural life cycle of young people getting older and starting to do adult life things which include … buying a house and that’s a lot of potential inertia that could last indefinitely.”

Bottom Line

Home prices will start to appreciate by historical norms as we continue to head towards a more ‘normal’ market, rather than the over 6% seen over the course of the last couple of years. This is great news! Homeowners looking to sell their home will have buyers, as more buyers will be able to afford them! 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. 19, 2019

Millionaire To Millennials: Don’t Get Stuck Renting A Home… Buy One!

In a CNBC article, self-made millionaire David Bach explained that: “The biggest mistake millennials are making is not buying their first home.” He goes on to say that, “If you want to build real financial security, real wealth for your lifetime, then you need to buy a home.”

Bach went on to explain:

“Homeowners are worth 40 times more than renters. Now, that first home doesn’t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but that’s how you get started.”

Then he explains the secret to buying that home!

“Don’t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means you’ll be able to retire in your fifties. Number two, you’ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).”

What will it cost to pay your mortgage in fifteen years? He explains further:

“For fifteen years, you got to brownbag your lunch. Think about that! Brownbag your lunch literally for fifteen years. You can retire ten years sooner than your friends. You’ll have real wealth, because you bought a home – you’re not a renter. And you’ll be financially secure for life.”

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one. 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.

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, Washington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Posted in Josh's Blog