From the Desk of Josh Barker
Your local Realtor,
Click Here to watch Josh's video blog for the month of May
- The first quarter of 2016 has proven to be the strongest quarter we have had for housing in the Redding, CA market for over a decade. Buyer demand is high and the length of time it takes for a home to sell is much shorter than in years past.
- The foot traffic report - "the report that tracks the number of homes that have been shown in a calendar month" is trending much higher than in the same period of time last year. This indicates that the number of homes that will likely go under contract in the second quarter will be higher than last year.
- The number of investors purchasing real estate in Shasta County has increased over last year. Reports show that investors made up approximately 12% of home purchases last year in the third quarter. The first quarter of 2016 is reporting closer to 18% of homes sold going to investors.
- The average sales prices are up in the Shasta County housing market this year compared to last year by approximately 8%. This trend is predicted to continue through summer and will likely cool off in the winter months. A recent survey noted that more than 35% of local homeowners believe that they have no equity in their home, when in reality that number is much lower. If you would like an instant snapshot of your homes approximate value for free...simply visit www.shastahomevalue.com
- Appraisals are proving to be more of a challenge than in recent years. This is not an uncommon trend in an appreciating market. Homeowners and real estate agents are often predicting where the market is heading while appraisers are tasked with justifying why a home sold for the price it sold for by using comparable sales. When markets appreciate quickly, it becomes more challenging for appraisers to locate suitable comparable home sales in order to justify contract prices.
- There has been some talk in the media as well as among home buyers and sellers regarding a potential housing bubble. Although interest rates have played a significant role in the strength of the housing market, the availability of credit for financing remains extremely tight. The days of stated income and very sloppy lending practices have not returned. In fact, the availability of credit is still nowhere close to what it was back in 2004 through 2006.
- Rental rates in Shasta County are still increasing. In many cases, the cost of owning a home is the same if not lower than renting. In addition, with California pushing to increase the minimum wage, it is likely we could see rental rates increase by more than 25% over the next 5 years. Owning a home has always proven to be a great hedge against housing cost inflation.
- The overall inventory of homes for sale in Shasta County is currently trending lower than last year. This trend is translating into shorter home marketing times and noticeable price increases. Last year we experienced a large increase in home inventory in the second quarter, this years home inventory will likely not reach the same levels.
- Interest rates are currently trending below 4% on a 30 year fixed mortgage and are projected to increase to above 4% by the end of this year. The Fed will likely meet 2 more times before the end of the year and provided the economy remains on the same course, we will likely see small increases in the interest rate. The cost of financing can be best described like this...If the interest rate increases by 1%, the borrowers payment would increase by an average of 10%.
- Distressed property sales have continued to decline over the last 12 months. Where once distressed property sales represented nearly 50% of all homes sold, currently distressed property sales represent less than 10% of homes sold. This is a good sign for our local market as we have nearly transitioned back to a normal balanced market. You can view the current foreclosures for sale in Shasta County by visiting www.reddinghomes.com/foreclosures/
Top slides for the month