June 2024 Market Update Report

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From the Desk Of Josh Barker

MARKET UPDATE FOR June 2024

Home inventories are on the rise climbing nearly 30% compared to earlier this year. While home sales dipped to 189 from 257 last May due to higher interest rates, new construction permits in Redding increased to 30 from 7, with many contractors shifting to remodels and additions. Mortgage rates, currently at 7.375%, are expected to drop slightly by year's end, which could boost buyer demand. Despite this, the average home price in May remained stable at $405k, down just a bit from $409k last year. This month we will dive into some of the hottest topics in the local market. As always, if you have any questions, please feel free to respond to this email or contact our office at 530-222-3800.
 

Home listings

The number of new listings coming to market in May totaled 362, up slightly from the 354 listings that came to market in May of last year.  Home inventories are averaging 700 homes for sale, up 10% compared to last year when home inventories averaged 635 in May of 2023.  Overall, many homeowners appear reluctant to sell their homes when it means trading a low interest rate for today's much higher rates. 

Home sales

The total homes sold in the month of May finished at 189, a notable 26% decrease compared to last year when sales finished at 257 for the month of May of 2023 and 307 in May of 2022. This continuous decline in home sales can be largely attributed to the combination of lower inventories and the impact of elevated interest rates, which are posing challenges for potential homebuyers. 

Construction

New construction continues to be slow-moving, with the City of Redding reporting a total of 30 permits pulled through April 2024 up from the 7 pulled through April 2023 but down from the 70 permits pulled through April of 2022. With the continued decline in new construction, many contractors are now shifting to remodels and home additions to keep crews busy. This shift is a welcomed change for many homeowners who previously had challenges locating skilled labor to hire. 

Interest rates

Mortgage rates continued to serve as a wet blanket to the housing market. Rates are currently averaging 7.375% locally and are down slightly compared to the 7.875% earlier this year. Mortgage rates play a significant role in buyer demand, as many of our local residents use bank financing to purchase a home. Many experts expect rates to drop slightly by year's end. Our office believes rates will likely be in the high 6% to low 7% range by year's end.

Home price expectations

Home price appreciation has stalled locally. The average sales price of a home in May was $405k, down slightly from the $409 average price for a home in May 2023. The higher-than-projected interest rate environment has played a major role in the leveling of home values. 

City of Redding Stastics June 2024

Shasta MLS Market Summary June 2024

Shasta MLS Sold Listings June 2024

Shasta MLS Active Listings June 2024

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Make it a great June,
Josh Barker

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

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