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
Dec. 2, 2019

Shasta County Market Update - December 2019

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


From the Desk Of Josh Barker @ RE/MAX

Redding has been ranked #3 among the top 25 coolest towns in America! 

Check out the full article here: https://matadornetwork.com/read/redding-california-outdoors-destination

Every time I make the trip north, after visiting other parts of California and as I drop down the hill between Cottonwood and Anderson,  I am always struck by the beauty of our area.  I am also quickly reminded of how little traffic we actually experience, except between the times of 5 pm and 5:15 pm - Ha Ha!   I can not help but smile at the snow-covered mountains that sit as the picturesque backdrop to our rolling hills and the eye-catching river that meanders through our community. Shasta County is a special place, and I suspect that many of you find it as beautiful as I do. 

Home Sales

Home sales in Shasta County finished at 233 in the month of November down from 263 in the same month one year ago. The largest contributing factor to the decreased number of home sales year over year is the absence of fire-related buyers that were in the market last year at this time. The slow down was expected and is expected to level out by the end of January.

 

 

New Listings

New listings coming to the market in the month of November finished at 234. This is down from 249 in the same month 1 year ago. The slight reduction of new listings coming to the market will be short-lived as many new homes are expected to reach the market in early spring. 

 

 

Current Inventory

The current inventory of homes available for purchase is averaging 1,039. This is down from 1,083 at the same time last year. The slight -4% decrease in home inventory is contributing to the overall price stability in our local market. Our company expects the inventory of homes available for purchase to decline between now and the end of January. In the early spring, we expect to see a noticeable increase in new construction which will provide much-needed inventory to our local market. 

 

 

Interest Rates

Interest rates have continued to remain historically low with the average 30-year fixed mortgage interest rate of 4%. There has been a noticeable increase in the number of low money or no money down purchases taking place in the local market. The more flexible lenders become, the higher the demand will be for homes. The ability for homebuyers to purchase with low down payments looks good on the surface but also comes with an increased risk of defaults and overall housing stability. Until now, our company has been optimistic about the strong fundamentals in the housing market. Although increased buyer demand is a good thing, if it is largely created by overly flexible financing options it could turn into a bad thing.

 

 

New Construction

New construction in Shasta County has been very slow to get moving compared to other regions in the state and country. Over the past 10 years, there have only been a handful of new subdivisions taking shape. The fires last year brought a noticeable increase to the number of permits pulled for new construction. Although these permits were pulled to replace previous existing home inventory, the increase in jobs and revenue being pumped back into our community has been positive. 

The second wave of new construction taking shape will be much more noticeable in 2020. There are multiple, new subdivisions currently under development that will be offering new homes for purchase throughout the county in early spring. This spring will be the first time in 10+ years that we will have such a high number of new homes offered for purchase. The largest factor in the success of these new subdivisions will be overall buyer demand and the volume in which these new homes come available. Having multiple builders bringing similar products to the market at the same time will be challenging to say the least.

 

 

California Housing Market

The California housing market has had its challenges over the past 12 months. Large Metro markets like the Bay Area and Southern California experienced softening home prices in the first part of 2019. It appears that home prices in these markets have reached a point that has squeezed affordability and will likely remain an issue heading into 2020. The challenges in other parts of the state could translate into a positive for our local market as some may choose to move to our community.  

Shasta County has remained affordable in comparison to many other markets throughout the state. The median price for a home in California according to Zillow is $552,000 while the average price for a home in Shasta County is $275,000. With housing prices that are half of the cost of the rest of the state, Shasta County remains a great option for many.

You can view the average value of your home instantly by visiting www.shastahomevalue.com

 

 

As always, if you have any additional questions regarding real estate, we are always here to help. Please feel free to email me directly josh@reddinghomes.com or contact me by telephone at 530-222-3800. On behalf of all of us here at the office, we wish all of you a Merry Christmas and a Happy New 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
Nov. 25, 2019

Expert Advice: 3 Benefits to Owning a Home

Success is something often worth repeating, and Brent Sutherland, a Certified Financial Planner and Real Estate Investor, has certainly made his way in a momentum-driving direction. Here are 3 tips he shares from a recent piece in Business Insider on the benefits of owning real estate:

1. Real estate diversifies your income

“While it is certainly important to be properly diversified with your investments, it is even more important to be diversified with your income. This is because the largest financial risk for most of you is the loss of your primary source of income, which is typically in the form of a day job.”

The article highlights how having multiple sources of income, such as those derived from real estate investments, can eventually lead to relying less and less on a day job. Sound dreamy? It can be. When done well, real estate investments may eventually open up your time and the financial freedom to explore other things, like travel and other aspirations you may have for the future, particularly in the golden years of retirement.

2. Real estate produces near-immediate results

“You can achieve and feel the results almost immediately. Property improvements are visible and tangible. You can cash, spend, and invest rent payments. Today! Not 30 years in the future.”

Currently, home prices are appreciating in all price ranges, and just last week CoreLogic announced their 12-month home value projection at 5.6%, an increase from 4.5% noted earlier this summer. With that in mind, real estate today is definitely driving immediate results!

3. Passive income can help you become financially independent sooner

“If you need $40,000 a year to live, you could alternatively invest in assets that generate an 8% cash-on-cash return. This is a very reasonable assumption. And it means you would only need to save a total of $500,000 (instead of $1 million). Yet, your investments would still meet your annual household living needs.

While returns, taxes, and inflation can, of course, affect your timeline, cash-flowing real-estate is a clear asset.”

Homeownership is a form of ‘forced savings.’ Every time you pay your mortgage, you’re contributing to your net worth by increasing the equity in your home, bringing you one step closer to true financial independence.

Bottom Line

If you want to increase your savings and overall net worth, real estate is a great way to go. To learn how you can make it happen, let’s get together to discuss the process. 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 Brent Sutherland?

Sutherland was 35 when he bought his first single home to rent out for income, less than five years later, he owns eight additional properties and part of a commercial real estate project.

Posted in Josh's Blog
Nov. 18, 2019

2 Myths Holding Back Home Buyers

In a recent article, First American shared how millennials are not really any different from previous generations when it comes to the goal of homeownership; it is still a huge part of their American Dream. The piece, however, also reveals,

“Saving for a down payment is one of the biggest obstacles faced by first-time home buyers. Dispelling the 20 percent down payment myth could open the path to homeownership for many more.”

Myth #1: “I Need a 20% Down Payment”

Buyers often overestimate how much they need to qualify for a home loan. According to the same article:

“Americans still overestimate the qualifications needed to get a mortgage, resulting in qualified potential buyers not even considering homeownership. Indeed, the Urban Institute report revealed that 16 percent of consumers believed that the minimum down payment required by lenders is 20 percent or more, and another 40 percent didn’t know at all.”

While many potential buyers still think they need to put at least 20% down for the home of their dreams, they often don’t realize how many assistance programs are available with as little as 3% down. With a little research, many renters may actually be able to enter the housing market sooner than they ever imagined.

Myth #2: “I Need a 780 FICO® Score or Higher”

In addition to down payments, buyers are also often confused about the FICO® score it takes to qualify for a mortgage, believing a ‘good’ credit score is 780 or higher.

To debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.

As indicated in the chart above, 50.23% of approved mortgages had a credit score of 500-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Believe it or not – your dream home may already be within your reach. 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. 11, 2019

75 Years of VA Home Loan Benefits

Today, on Veterans Day, we salute those who have served our country in war or peace, and we thank them for their sacrifice.

This year marks the 75th anniversary of VA Home Loan Benefit offerings through the Servicemen’s Readjustment Act, also known as the GI Bill. Since 1944, this law has created opportunities for those who have served our country, ranging from vocational training to home loans.

Facts About VA Home Loans:

  • Nearly 24 million home loans have been guaranteed by the Veterans Administration.
  • Nearly 82% of VA home loans are made with no down payment.
  • The VA also provides grants to help seriously disabled Veterans purchase, modify, or construct a home to meet their needs. Last year the VA provided 2,000 grants totaling $104 million.

Benefits of a VA Home Loan:

  1. No down payment
  2. No Private Mortgage Insurance*
  3. Lower credit score requirements
  4. Limitation on closing costs
  5. Lower average interest rates

*More information on VA Home Loan Fees

Bottom Line

The best thing you can do today to celebrate Veterans Day is to share this information with those who can benefit from these opportunities. For more information, or to find out how to qualify to use a VA Home Loan Benefit, let’s get together to navigate through the process. Thank you for your service!

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