Feb. 1, 2022

Shasta County Market Update - February 2022

 

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

 

From the Desk Of Josh Barker

First and foremost, I hope that all of you are having a great start to your year! We need the rain but this Chamber of Commerce weather has been amazing. If you live out of town, come visit us soon! This month's report focuses on the hottest topics trending now in the local market. As always, if you have any additional questions please feel free to respond to this email or contact us here at the office at  530-222-3800. We are here to help!

MARKET UPDATE FOR FEBRUARY 2022

Home Sales

Home sales in the month of January 2022 finished at 213 down 6% compared to 226 closings in the month of January last year. The continued deceleration in home sales is largely a result of fewer out of town purchases related to the pandemic. In the early stages of the pandemic "out of town'' buyers with work from home options, as well as second home purchases, were more common. The majority of these types of transactions have now taken place and home sales volumes are beginning to return to a new normal.

Active Inventory

Active home listings in the month of January finished at 499 listings for sale down 4% compared to the 521 listings available in January of last year. Surprisingly, current active inventory is higher than the 466 listings available for sale in March of last year. If this trend continues, we could expect to see higher home inventory in 2022 when compared to last year. This is welcomed news for many as the current options to purchase are limited.

Mortgage Rates

Mortgage interest rates took a hit last month when they climbed by an average of 0.5% from an average of 3.375% in early December to an average of 3.875% at the end of January. The initial increase in mortgage rates has largely been the result of the federal reserve reducing the amount of bond purchases also referred to as tapering. The federal reserve has stated they intend to continue to decelerate bond purchases significantly in the coming months. This policy action combined with the anticipated rate increases projected this year will likely send mortgage interest rates higher in the future.

Mortgage Forbearance

The number of homeowners in a mortgage forbearance due to the pandemic is improving dramatically with nearly 4 out of 5 homeowners participating in the program transitioning out of the program. Some have chosen to sell the property and recapture some equity while others have been able to reinstate an existing mortgage or refinance. All good signs for what could have been a much larger problem. Foreclosures are projected to increase slightly in the short term as non performing loans are worked through the system but the long term forecast is very promising.

Home Price Expectations

Home price expectations are top of mind for many home buyers and sellers in the local market. Inflation, potential interest rate hikes and supply chain disruptions are collectively creating uncertainty in the real estate market. However, the single largest contributing factor to home prices in 2022 will likely be the supply of homes for sale relative to demand. Pent up seller demand reaching the market combined with higher interest rates impacting purchasing power could certainly decelerate appreciation in the market. According to Zillow, last year's appreciation exceeded 18 percent locally while this year's projections are averaging 5.5% based on the average of major economists. Keep in mind that 0-3 months supply of homes for sale is considered a seller's market while 4-6 months supply is considered a neutral market. The current supply of homes for sale is equal to 1.65 months indicating the local market is currently classified as a seller's market.

 

Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. If you have any additional questions regarding this market update or have additional real estate questions please feel free to respond to this email or contact our office at 530-222-3800

 

 

 

 

Learn more about Josh Barkers 5 proven steps to selling your home by visiting 

reddinghomes.com/selling-your-home/ 

Learn more about Josh Barker's proven ideal investment formula by visiting

reddinghomes.com/buying-home/

Check the average value for your home instantly by visiting reddinghomes.com/home-value

 

Make it a great February! 

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
Jan. 17, 2022

Josh Barker Real Estate Podcast Episode #3

🏠💰Home Value Tool➔


Frequently Asked Questions

Is the housing market going to crash in 2022?

The housing market in the first quarter of 2022 appears stable. The headwind of potentially higher interest rates may be taken over slightly by the tailwinds of low inventory. Next, the amount of investor speculation in the Shasta County market is relatively low. Lastly, the dominant type of financing in the local market is 15 to 30 year fixed loans. It is unlikely that the real estate market will experience a crash in 2022.

Are financing rates going up?

Mortgage interest rates increased an average of 1/2 percent between December 15, 2021, and January 15, 2022. The federal reserve has reported that they intend to raise interest rates 3 times in 2022 which could translate into higher mortgage interest rates in 2022.

Is it worth fixing your home before selling it?

The majority of home sellers that chose to fix a home up before selling state that the number one improvements they plan to perform before selling are flooring and paint updates.


Transcription*

The transcription is auto-generated by a program and may not be accurate to the conversation. In order to ensure you get all the information from the video properly, you must watch the video.

Joey: So I'm here with Josh Barker again, again, right? Episode number three.

Josh: Yeah.

Joey: We were just off-camera, we were talking about the market and some of the headwinds and tailwinds that are in play right now in January of 2022...

Josh: Yeah.

Joey: And what kind of effect that's gonna have over the next few months? Because real estate is very seasonal...

Josh: It is.

Joey: It always slows down in the wintertime, it picks up in the spring...

Josh: Yup.

Joey: But it's picking up a little faster than it normally does, right? You were telling me that it's a little faster than this time last year or the year before.

Josh: It is, yeah, we're getting more calls right now in January than we typically get in January in previous years. So, I think there's that pent-up seller demand that we had talked about before, where you had people.Obviously, because of the pandemic that decided to stay put. You had the eviction moratorium that was, you know, keeping the inventory down and even the foreclosure moratorium, and so, now you're starting to see people say, Okay, we're done, we've waited as long as we can wait, it's time to get moving on. And so, we're starting to see a pretty significant uptick in the number of appointments that we're going on, that people wanna sell their homes, yeah.

Joey: And there's a couple of factors that we were talking about that we thought, you know, people should know about sellers or potential sellers should know about, like number one is, the feds have said that they wanna raise interest rates three times in 2022, right?

Josh: Yeah. Yeah.

Joey: And as we learned in our first episode, that's a headwind.

Josh: Yup.

Joey: It's not an immediate headwind, meaning they raise interest rates on a Friday and Monday, the market comes down, but it is one of those things that it reduces the buyer's ability to how much they can spend.

Josh: Yup.

Joey: And so thus, it has an effect, the headwind on the seller price, right?

Josh: Yeah, you're right, absolutely.

Joey: Now, the big question would be, is how big of a headwind? You've said like a half a percent reduces, was it like 5%?

Josh: Yeah, for every 1%, the interest rate goes up, it could have an impact on purchasing power by about 10%. Yeah.

Joey: Okay, so that's one, but we do have quite a few people moving here. Redding is still very affordable when you put it on the scale of California.

Josh: Sure.

Joey: So you've got these headwinds and tailwinds hitting each other, and we're not sure how much they're gonna affect, but interest rates are a headwind, so wanting to go to market before interest rates increase, I mean, theoretically that would...

Josh: Yeah.

Joey: Garner you more for your home, right?

Josh: Yeah, and for this video for some of our listeners right now, one of the more significant things that's been happening over the last month since our last podcast was interest rates did jump. So, pretty much starting around December 14th, 15th, we started to see rates start to creep up. And a big part of that is the interest rates haven't even gone up yet from the Federal Reserve standpoint, they haven't raised those yet, but the reason why is because the Federal Reserve at the same time that they're saying they're gonna raise interest rates, they've also said they wanna reduce the purchases of bonds. And so, by them tapering and purchasing fewer bonds, that's actually moving the interest rate up now, so just that activity alone has moved the interest rate up one-half a percent on average over the last 30 days.

Josh: And so for those who were already in the purchasing process, they probably realized real quick from their lenders, hopefully, that they needed to lock their loans, but also for refinances, if you didn't lock your loan, you're probably not as happy with that rate today, 'cause the rates did move up. Now, all of that's happened prior to the interest rates that are supposed to go up, the first one will likely be in March. Federal Reserve said, they wanna raise the rates three times in 2022. I just read another report the other day that said maybe four times. They're still trying to deal with that massive inflation, that the whole economy is dealing with. So the first rate increase would likely be in March, and then each quarter thereafter, you could expect that it's a strong consideration by the Fed. I think that first one in March is for sure. And so when they do it, it's every time they raise, it's usually about a quarter percent, which translates right into an increase of almost a quarter percent of the mortgage market too.

Joey: So, you don't know what's exactly how the market is gonna go, but the idea is that if you know a headwind is coming and you are thinking about selling, now might be a great time to reach out, find out, Hey, what is my home worth in the current market, and see if that sits well with you.

Josh: Yes. I mean, look at that and also 'cause we have clients that are thinking about doing some remodeling too before they actually come to market. And actually, that's more concerning for me than anything because in some cases, homes do need to be updated a little bit before they go to market, there's plenty of instances where I would say that's a good move, but there's a lot of instances where it's not. And right now what we know the interest rates are highly likely to be going up significantly in the short term if it took you 90 days or 120 days or 180 days to finish a remodel on the home, and your goal would be because it would help you get more money for your house, if the interest rate goes up half a percent during that time then whatever you thought you were gonna get in the benefit on the market, it might be eroded away by the rise of the interest rates.

Josh: And so, I think people need to slow down and just really have a professional come out, meet with them and really walk through that scenario and see what is the right thing to do? You know, if you're siting on a house right now with pink countertops, then yeah, maybe you're gonna have to do a little bit of an update, but if you got white tile, you might wanna let that go.

Joey: Yeah, because you know it's kind of a cliche, but the 90-day project becomes a 180-day project real quick.

Josh: Yeah.

Joey: And the 180 days is six months, now we're talking July, that's two potential Fed rate increases, 'cause you see it quarterly, so that's March and that would probably put us in June.

Josh: Yup.

Joey: So you just kinda have to think about that and it's not just the contractors, we're short on labor, but also supply chains. We just remodeled our house.

Josh: Yeah.

Joey: And we were shocked. It's just every little, Oh yeah, we don't have that title, or no, that paint's gonna be... And you know, has this rippling, this domino effect where you're trying to line up these contractors, you're trying to get materials, and it just doesn't. It's always kinda been that way. I think that's always been a thing, like, what contractor comes in under budget and ahead of schedule, it almost never happens.

Josh: Hard, yeah.

Joey: And no dig on them, we're in an unusual time. So, before you dump $30,000, $40,000, $50,000 grand into a home, 'cause you think you're gonna make so much more, you need to talk to a professional and say, hey, if I put $50,000 grand into this, would I guarantee to get more than $50,000 grand?

Josh: Yup.

Joey: And even then if it's... You put $50,000 grand in something to get $60,000 grand out, you're putting a lot of money in play for...

Josh: A lot of money in play. And it's a pretty big risk, right?

Joey: Yeah, big risk.

Josh: So, I think you're right. I think it's pretty wise, I think to slow down, and a lot of people think that you gotta get your home ready before you have the agent come out and I just don't think that would be wise right now. I think it would be better to have the agent come out and then evaluate what your options are, do we do an upgrade? Do we not do an upgrade? How soon do we bring it to the market? Understanding that there are some significant factors that might have an impact on the market going forward. I mean, I don't wanna paint a doom and gloom though, I mean, that the...

Joey: No, I don't think it is.

Josh: No, I don't either. Most of the reports that I'm reading right now are averaging around 4% and 5% appreciation this year, so you know, we still have a low inventory market that we're currently in, and so, it's highly likely that interest rate or that the... Even with interest rates going up the pricing of homes will still likely go up a little bit, just it's very unlikely it'll be like it was over the last 18 months.

Joey: Well, that's like the hottest 18 months the markets have ever seen, I mean, that's kinda crazy.

Josh: Yeah, yeah, definitely one of the hottest.

Joey: Yeah.

Josh: So, something to be just I would just slow down and have somebody come out, take a look at it, get a good feel for what your options are, do what you have to do, but try to avoid doing anything that might be discretionary in nature.

Joey: Yeah, and one of the big X factors is how many people are gonna move to Redding? 'Cause, that's driving a lot of the purchases. Like you said before, we don't have a high investor. When the market wasn't good in the early 2000s, it was because there was this large percentage of homeowners who were investors.

Josh: Yup.

Joey: Secondary and tertiary homes.

Josh: Yup.

Joey: Now, we're not seeing that. I think you said it was around 10%, which is very small.

Josh: Yeah, yeah, and it's a tough number to track too, right? So, all the lenders that I talk to, that do a lot of the origination for obviously for the financing up here, and a lot of the brokers that I speak with on a regular basis, I mean, we're pretty much all on the same page, that it's about 10% or less of all purchases in the county right now, or what we call investor, meaning non-owner-occupied kind of investments. So, to your question initially of that, what does demand looks like? It's not gonna be what it was. I mean, 18 months ago, when the pandemic first hit, you had a whole lot of people that were disrupted, so they could work from home, they were looking for other places to maybe live, because they could live anywhere and work from any location, and so, we started attracting some people from Sacramento, the Bay Area and Southern California, and I think that was a great thing obviously for us, but it probably gave us a little bit more additional demand than we may have otherwise had, obviously.

Josh: I do think it's helped us though, because I think we've become more popular and a little bit more known to the rest of the state, so even though our volume of people moving in from out of the area might go down a little bit here in the next year compared to 18 months ago, or over the last 18 months, I still think it'll be higher than it would have been if it had not been a pandemic. You know what that means? 'Cause, we're becoming known now. I mean, I would say that in a lot of circles, Redding is being brought up now.

Joey: And going back to that whole headwind, tailwind, that's a huge tailwind. People moving into the area, that's...

Josh: Low inventory relative to demand is definitely a tailwind.

Joey: Yeah.

Josh: Right? So you've got the headwind of interest rates, right? Rates going up is a headwind that we have to overcome. You have the tailwind of low inventory relative to demand that's pushing pricing up, and where those two intersect and reconcile is where you're either gonna have an appreciation or market flatter going down, and I would say the tailwind is still a little stronger than the headwind, but the headwind is getting stronger.

Joey: I would think that the other big questionable headwind/tailwind is you talked about the forbearance market, it's still very, very cloudy on how that's gonna get handled because there were quite a few people that were not paying their mortgage, they were getting the moratorium, and we're not really seeing how quickly their...

Josh: Process to enter into the market.

Joey: Yeah. Are they getting refinanced through their banks, are they saying, You know what, I bought this house five years ago, I'm sitting on a ton of equity in five years, we still don't know what that's gonna look like, and that's gonna be potentially either a large tailwind, meaning, nope, the forbearance is very, very low or it's gonna be a headwind, meaning, suddenly there's a lot of inventory that hits the market all at once.

Josh: Yeah, I don't know if it's gonna hit all at once. I think it's gonna spread out. I mean, to get to the point on that. I think we definitely have some distressed properties that are in the market still that a lot of it was created because of the pandemic. You had the disruption in employment and the ability to pay, and maybe even for some landlords, it was a disruption in their cash flow, and their rentals and 'cause their tenants weren't paying and they, therefore, weren't able to make their payments on their mortgages. So, either they were gonna have a loan modification provided by their bank or refinanced based on a couple of options that may have been available. Or they're gonna sell the property in one manner or another. So, right now, you can assume that a lot of those folks do have equity, even if it's thin equity, they probably still have some equity.

Josh: So I think you could see those properties if they were to get ahead of it and do it quickly, they could expect to see those homes sell on the market as a normal sale, which would be great. If you're behind on your mortgage and you can't find a way to modify the loan or refinance it, then gosh, consider selling it and putting a little bit of cash in your pocket.

Joey: Versus losing it.

Josh: Versus losing it. Absolutely. And so, I think we're gonna see some of that. I don't know if it's gonna all come at the exact same time, but right now we're sitting in just under 600 homes for sale, and a healthy market's like about 1000 to 1100 based on current sales volume, so we need a lot of inventory this spring. And I'm hopeful that that happens, but right now it appears that we're gonna see more inventory this year than we did last year, for sure.

Joey: Are there any other factors right now that sellers should be... The variables that they should be weighing. We talked about interest rates coming, a potential increase in inventory, do a forbearance market, should you be putting money in the home? Are you really gonna get that money back? Are you gonna hit the market? The two interest rates. Is there another big factor that a seller should be thinking about right now?

Josh: Well, the spring rush is what comes to mind. So, normally we see our inventories really start to grow significantly by late March, early April, you start to see the inventory grow, and we call that our spring rush. And if a client or a seller has the ability to get to the market prior to the spring rush, what they could possibly enjoy is less competition and a buyer who's trying with some urgency to get into a home before the interest rates get pushed up too much. And so, there's some opportunity, I think that sits there for those who can come to the market a little bit earlier. But timing-wise, it's all relative too though, so if you're buying and selling in the same market, let's say the market gets a little softer in June, okay? If you're selling your home in a little softer market, but you're also buying in the same market, but you're buying is a little softer as well, so it kinda works its way out. But if you wanted to sell and liquidate an asset or move and if you do it before the spring rush, I think you're probably gonna enjoy a little bit of a shorter market time. Maybe a little bit higher buyer demand, because rates are being pushed and buyers wanna take advantage of the lower rate while they can. So I think there's an opportunity in that.

Joey: Is there anything that you would think... 'Cause you talked about in 2022, the numbers look like maybe about a 4% to 5%, and that's what we should see as far as to increase in value across the board.

Josh: Yeah, they did, like the Mortgage Bankers Association, National Association of Realtors. There's like a collection of different... It's like five or six companies that all came and gave their opinion on what the appreciation was gonna look like this year, in the average between 4% and 6%, that was the total range that it was.

Joey: For the entire market, and that's the.

Josh: Yeah.

Joey: People gotta understand that there are segments within the market.

Josh: There is.

Joey: And so there's gonna be segments that probably see a much greater than that, and there might even be segments that are either stale or there's a glut of inventory or something, or there's just not a lot of buyers. Because one of the things I think is when I looked at the segments that sold, definitely the middle range climbs at a much higher than the high range.

Josh: It does.

Joey: Because there's such a limited number of buyers.

Josh: That's right.

Joey: And so if you are sitting at the higher end of the range, you may not... I don't think you felt that would be a good report, maybe for one of our future podcasts, if I don't know if we could get that, but kinda show like appreciation by segments.

Josh: Yeah, we could probably take a sub-division and say, Okay, in this subdivision it's improved. The average selling prices went from here to here over the last 12 months, and then take a higher price subdivision and compare from this year over the last year. You could identify that. We've done it a few times actually. We used to do it like with Coral Ridge, which is a subdivision here in town, and it's a lower price point, and then we put it up against White Hawk, which is a higher price point.

Joey: Oh, yeah. One of the highest.

Josh: And one of the higher ones in the market. Yeah. And so when we compared the two, we saw that Coral Ridge did appreciate at a much more significant number than White Hawk did. And to your point, it was because the buyer demand and the lower price range was higher and it pushed appreciation in that market faster. And I think we're gonna see something like that again too, where who's gonna supply the market first is really what's interesting in this, right? So, as we go on these appointments right now, we're trying to figure out, okay, who's coming to the market at a higher number? Is it the lower end that's coming in faster, or is it the upper end that's coming in faster?

Josh: And we haven't seen a ton of upper end yet. And I think that's coming, I think they're gonna be here in the spring. I think that's when you're gonna start to see the higher-end inventory really start to hit the market by country properties, for example. Those tend to sell for a little bit of a higher price, but they all start coming to the market as soon as those trees start to bloom. As soon as there's a little bit of green on those trees, that's when you start to see a country property come to the market at a high volume, and it's because it's with yellow flowers and trees are budding out and then everything looks great and country property starts to hit the market, and that has a saturation effect on what's available to purchase.

Joey: And I wonder what the ratio of... 'Cause we talked about. You talked about the ideal inventory being 1000 to 1100. I wonder what that is per segment too because you don't see a lot of home selling in that higher... So you kinda wanna beat the I guess, it depends on when the buyer hits the market too.

Josh: Well, it's this year too, I mean, last 18 months, we saw more homes sell in the upper end than we've seen in a long time, a really long time. And the question is, can we do it again in 2022? Are we gonna see some of those upper-end properties selling at the same volume that they did last year? And I suspect probably not, not at the same volume, but there will still be some more sales than I think we were experiencing three or four years ago. You know, again, Redding's beginning to become a little bit more popular, things are... Gosh, I'm just blown away by some of the positive conversations that I'm hearing from friends of mine that live in the Bay Area in Southern California, and when they talk about Redding, it's a pretty optimistic vibe right now.

Joey: Well, we've talked about a few things, there's several projects that are going on, construction that's going on. The airport is expanding.

Josh: Yup.

Joey: It's got three airlines, they keep adding flights, direct flights. And talking to Megan of Shasta EDC, she was talking about how they would like to add more and more flights...

Josh: Right.

Joey: Major different markets, Denver, Portland, Phoenix, all these different things, and it just depends on volume...

Josh: Yeah, you need demand too, right?

Joey: Yeah.

Josh: You gotta have people who wanna fly there.

Joey: Exactly. So there's a lot of factors that... That's... I've been bullish on Redding for a while now...

Josh: Yeah.

Joey: It's been several years.

Josh: Yeah.

Joey: And just seeing the rest of the state and seeing how congested they are. I just went to Sacramento a couple of weeks ago, and was just blown away...

Josh: Oh, yeah.

Joey: Like, how congested Roseville and Citrus Heights and Rockland... You know, I used to think of those areas and they were the out... They are... It's bumper to bumper. And I think why would... It's just... To live so tight.

Josh: If you don't have to drive into work every day, you know, at a facility somewhere, which obviously would have made a big impact on where you could live. If you have flexibility though, oh, man, I think Redding's got some really good appealing things to it. And you and I know what those are, but like the trail systems are incredible and they're focused on improving the trail systems. I'm watching people walking around everywhere. We've had like Chamber of Commerce fly there the last week and a half where it's just been like, "You gotta be kidding me. This is January and I'm enjoying these days that we're getting to enjoy." It's fantastic.

Joey: On a side note, my aunt lives in... I was raised in Alaska. My aunt lives in Palmer, Alaska, and a couple of weeks ago she called and it was, I think, five degrees and they were having hurricane-level winds that they'd never had.

Josh: Right.

Joey: And she was just complaining to me. And I said, "Oh, I know exactly how you feel. I went walking today, it was 54, but it felt like 52. It really did. I had to put a scarf on and she hung up. But my wife and I went walking this weekend, it was like these harsh Redding winters, they're just...

Josh: Oh, I know. Yeah.

Joey: I think it broke 70... Really truly broke 70 degrees in January, so this weather will bring people as well.

Josh: Oh, that's great man, yeah.

Joey: So the bottom line is, there are several factors every year, there's constantly headwinds and tailwinds. We know for sure some of the headwinds coming and a potential increase in forbearance inventory on interest rates going up at least once, and they've chimed three times. So we know those headwinds are coming. The big question mark is, the tailwinds, how strong will they be? Will they overcome the headwinds? If so, by how much? And when you should bring your property to market?

Josh: Yup.

Joey: You know? And so, the bottom line is, get involved with an expert, call somebody on Josh Barker real estate on the team. Have them come out, assess whether or not you should be putting $50,000 grand into that? Like, are you really gonna get that money back?

Josh: Yeah.

Joey: And are you going to get to market in time to maybe get that spring... What was the term you used?

Josh: Spring rush.

Joey: The spring rush.

Josh: Yeah.

Joey: So all that's coming and it's speculation, but that's how that works.

Josh: Yeah, it is, and I think you're exactly right. I would just echo that our inventories are still hovering around that 600. For those of you who are shopping for a home right now just be encouraged, there's gonna be some more opportunities, I think, going into the spring, so that's a good thing. But as that inventory grows, it's gonna have a little bit more pressure on homeowners. Market times are gonna go a little longer, the amount of buyer demand might go down a little bit. Keep in mind that interest rates right now, they've already bumped to half a percent in the last 30 days. So if you weren't paying attention, you may have missed that. And that's before the Federal Reserve starts raising rates. Like we said, it's probably gonna start raising in March and we're going each quarter thereafter if they stay with the plan they've announced, subject to change, and if you're thinking about doing a remodel, like you said, yeah, be careful. It could take longer and be more money than you thought. So, really evaluate what can you get today, and is that sufficient to reach the goals you have versus taking this risk of putting a massive amount of improvements into your home, only to find out that because of the market dynamics changing, you didn't gain much from it. So, those are the things I think we just gotta watch out for.

Joey: Well, if you think about this, this is kinda like a mindset of, "Okay, can you time the market perfectly?" Right? So if you time the market perfectly, congratulations, you're awesome. Okay, you did. Then you have to look if you do not time it perfectly one direction versus the other direction, if you say, "Well, I sold my house. If I would have just waited a few more months I would have got a few thousand versus I waited too long and there was. The interest rates went up, there was a glut of inventory and suddenly I... " You know what I mean? You didn't lose money, you didn't have it on the front, but you did lose money that you didn't get on the other side.

Josh: Yeah. No, and we're obviously probably in the ninth inning for significant appreciation in this cycle. I don't think anybody's really arguing with that, I mean we could still see some appreciation because our inventories are still low. And until we start to re-supply that existing inventory or the replenished inventory to a meaningful level, we're probably not gonna see too much of a negative in terms of appreciation. But it's just not the thing to echo would be, it's not gonna be a significant loss over the last 18 months. If that's what your expectation of real estate is, maybe let down this year.

Joey: Do you... I hate to hit you with a question out of left field here, but do you have any idea on how long homes are sitting in inventory now versus maybe when they were at the height of the market?

Josh: Yeah, we were sitting right around 98 days from start to finish. And then that's a 45-day Escrow, so it's just over a 45-day market period on average.

Joey: Which is not that long.

Josh: It's not that long.

Joey: It goes fast.

Josh: It is, yeah. Over the last 20 years, we remember when it was like 180 days on average before homes sold, it was brutal. But homes that are priced accurately out the gate, in price ranges where people typically shop, you could expect them to sell in as early as two weeks, in some cases with competing offers. So, still a great market to sell in. I certainly don't wanna downplay that.

Joey: I think that'd be great next time we meet, if we can show some numbers on the segments, how fast a segment moves, what kind of appreciation a segment saw, I think that will clear things up. Because I think a lot of people see the market as the market, right?

Josh: Right.

Joey: Everything went up 10%.

Josh: Some percent. Yeah, and it's not.

Joey: And it always takes 90 days and you go, if the higher end probably sits a little bit longer than the lower end, and it didn't appreciate percentage-wise as much as the lower end. And so that has a big burn. So if you're sitting at the higher end now might be a time to get a professional involved and find out so that you can get those numbers and you can see what kind of... How long should you be on the inventory, how much inventory... Because inventory is your competition.

Josh: Yeah.

Joey: That's the other big thing is, there isn't a lot of competition at that space, but it's relevant or it's relative to how much or how many buyers there are.

Josh: Oh yeah. Well, it's supply and demand economics 101. It's... If you follow that principle you probably will be going in the right direction, you know, for sure. So, yeah.

Joey: So the bottom line is, give Josh and his team a call, they can come out assess, no obligation, let you know, get a professional's opinion on what you can and should do.

Josh: Absolutely, yeah, and I would totally recommend that. I mean, most people are gonna interview two or three agents, and I think it's wise to do that. Compare services, compare strategies, and make a decision at that point you think works best for you.

Joey: 'Cause it's not all the same.

Josh: It's not all the same.

Joey: The marketing plan really, really matters, right?

Josh: It does. It does.

Joey: The marketing plan should reflect what the market looks like, right? I know you do a lot of marketing outside of the area.

Josh: We do.

Joey: Because there's a lot of buyers coming from outside of the area. And so, the marketing plan should probably extend past the county line.

Josh: Absolutely. No, I totally agree with that.

Joey: Well, thank you for your time, Josh. Until next time.

Josh: Thank you.

Joey: If anybody has any questions, they can give you a call.

Josh: Sounds great, Joey, thank you.

Joey: Thank you, Josh.

Posted in Podcasts
Jan. 3, 2022

Shasta County Market Update - January 2022

 

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

 

From the Desk Of Josh Barker

First and foremost we hope that all of you had an amazing holiday season. The year 2021 for Shasta County Real Estate served as a transformational year for home values. The supply of homes was stripped away in early months and buyer demand grew massively due to migration pattern shifts and abnormally low interest rates. The year 2022 real estate will experience some additional changes as interest rates will likely rise, home inventory grows and the number of home sales each month finds a new normal. If you have any questions, please do not hesitate to reach out by responding to this email or contact us at the office at 530-222-3800

MARKET UPDATE FOR JANUARY 2022

Home Sales

Home sales in the month of December finished at 265 down 23% compared to 343 sold in the month of December of last year. The reduction in home sales is largely due to the slow down in out of area purchases and overall higher home prices putting pressure on many home buyers. 

Active Inventory

The number of homes active for sale has continued to grow, finishing the year at 588 up nearly 20% from the 465 homes available in March of 2021. Inventory has continued to grow slowly in recent months as home sales have started to cool off, the eviction moratorium expired and the foreclosure forbearance was lifted. 

Pent Up Seller Demand

Many home sellers understandably chose to hold off listing their homes during the first phases of the pandemic. This trend is beginning to change as a larger number of homeowners are reportedly making plans to sell their homes this year. 

Rising Interest Rates

Interest rates are projected to rise this year. The federal Reserve has stated that they intend to raise interest rates 3 separate times in 2022. This is largely due to the current high inflation and the unusually low rate environment that was created to stimulate the economy during the initial phases of the pandemic. For every 1% the interest rises, the purchasing power of a home buyer is diminished by nearly 10%. The anticipated rise in interest rates will likely have an impact on both affordability and the desire of existing homeowners to refinance. 

Sellers Market

Although home sales have slowed and inventory has grown, it continues to remain a sellers market. The absorption rate (number of homes sold relative to demand) is currently resting at 1.92 months supply. Traditionally 0-3 months supply of homes for sale is classified as a sellers market, 4-6 months supply is considered a neutral market and 6+ months supply is considered a buyers market. Currently, accurately priced homes can expect to sell in as little as 2 weeks or less and in some cases receive multiple offers. 

Home Buying Forecast

Traditionally the housing market in Shasta County tends to cool off during the holidays and begins to pick up speed in mid February as more homes come to market. Home Shoppers could expect to find the greatest number of home buying options this spring as the number of listings coming to market increases and country properties come to the market for sale. The largest challenge may be securing a home purchase before the anticipated interest rate increases.      

 

Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. If you have any additional questions regarding this market update or have additional real estate questions please feel free to respond to this email or contact our office at 530-222-3800

 

 

 

 

Learn more about Josh Barkers 5 proven steps to selling your home by visiting 

reddinghomes.com/selling-your-home/ 

Learn more about Josh Barker's proven ideal investment formula by visiting

reddinghomes.com/buying-home/

Check the average value for your home instantly by visiting reddinghomes.com/home-value

 

Make it a great January! 

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. 8, 2021

Josh Barker Real Estate Podcast Episode #2

🏠💰Home Value Tool➔


Frequently Asked Questions

Is it better to buy established or build?

There are Pros and Cons to both buildings or buying existing homes. Building a home can increase the chances of receiving exactly what you want with less maintenance in the first 10 years. However, the process can take longer than expected and the cost can be higher. Purchasing an existing home may cause you to compromise on a few items but can typically be accomplished faster and with less work involved. Many believe the best compromise is to purchase a new existing home from a reputable home builder.

What does a 7.5% cap rate mean?

Utilizing the capitalization rate value is a great method for evaluating an income property as it takes into account the property’s operational expenses as well as its current vacancy rate. In addition, the Cap Rate value can reveal whether the income property has the ability to pay off a mortgage or not. Cap Rate = Annual NOI / Market Value

How long does it really take to build a house?

The typical home build period in Shasta County can average 6-8 months. The process can be extended depending upon the amount of land development involved and engineering that may be required to facilitate the build.


Transcription*

The transcription is auto-generated by a program and may not be accurate to the conversation. In order to ensure you get all the information from the video properly, you must watch the video.

Joey: Joey Gartin here with Josh Barker. Again, laughing off-screen before rolling. It's bad stuff, man.

Josh: Keeping it real here. Yeah, keeping it real.

Joey: So last time we got together...

Josh: Yep.

Joey: The big topic was Zillow. The fact that Zillow had stopped their purchasing of homes, they were laying off a quarter of their employees, and what impact did that have. And you said, "Hey, not really because they weren't buying anything here."

Josh: Exactly.

Joey: So I kind of segued into, "Okay, well, how much inventory do we have? What does the market look like?" And one of the topics that arise in that is, we don't see a lot of new construction, or at least, I guess that's very subjective, I don't see a lot of new construction for inventory. Why is that?

Josh: Well, I think what you're probably getting to there is like there's no meaningful level of construction that makes everybody go, "Wow, everybody's building everywhere," and it's really a loaded question because it's really a question of, is it the chicken before the egg, or the egg before the chicken, kind of thing, where if we build a lot of new additional homes to add to the housing inventory, do we have enough people to buy those homes that the contractors can keep building them quickly? Or is it a situation where if we build them, the people will come? And that's what makes it really hard is that I think if you get too far ahead of yourself, there's this little doubles in the details kind of thing where absorption rate is really the guiding factor on how many homes are actually sold each month.

Josh: And if you add too many homes to the housing supply and you don't have enough people to buy them, they sit. And if you're a contractor building new homes, that's a major problem. We have seen over the last couple of years with the Carr Fire and the fire that was there in Paradise, that that really caused us to have this pretty big construction boom here, because the homes that were burnt down, that were rebuilt, that added to our construction here in the marketplace, but it also gave an opportunity for contractors to buy vacant lots too and build homes as well. So we're starting to see some construction. It's not all bad. It's definitely getting better.

Joey: It's starting to trickle in as far as like final production hitting the market.

Josh: Oh yeah, yeah, a lot of the Carr rebuilds have already been done, and the homeowners, most of those have already rebuilt at this point. Some of the vacant lots that were sitting out there in the inventory were homes that were burnt down, that was purchased by contractors, most of those have been rebuilt. There are still some vacancy lots out there, but a lot of it has been done, a majority of it has.

Joey: Do we have... My next thought is like our volume. How many contractors do we have? 'Cause I can only think of a couple of larger names of actual subdivision developers, right?

Josh: Yeah, yeah.

Joey: Versus individual contractors.

Josh: Yep. I'm not gonna go into the names of them because that would be disrespectful to anybody I didn't mention.

Joey: Yeah.

Josh: But there's four or five larger ones in town. We have a large national home builder that just came in and acquired a subdivision in West Redding that's gonna be building, in my understanding, in the spring, but as far as contractors, there's a lot. I don't even know how many. I mean it would be over 100, because a lot of them just do one home or maybe two homes a year, and they do it for that reason. They only wanna do one or two a year, so there's a lot of people who do that. And then there's some that are actually more productive and volume-minded, and those are the ones that we normally see running around on the market.

Joey: So in your opinion, do you think we have enough new construction in Shasta County? I don't even know what the inventory numbers would be for that, but it seems like there's almost nothing.

Josh: It feels that way, but there is. And do we have enough? Probably a little light but for good reason, right? So right now you've got some challenges with contractors. What they're dealing with right now is you have the labor shortage itself. So that plays into this. Can I find enough people to... So that if I go out, make promises and bids on different projects, can I fulfill those promises and bids with people? And then you have the wage piece of it, where some of these folks or the wages are... They're competing against each other a little bit, some contractors are taking labor from other contractors. And so, that's causing wages to go up because one way to lure them over is wage.

Joey: Sure.

Josh: And so, we're seeing some of that happening. We talked about in our last video about the disruption of the supply chain, and when it's harder to get access to those products that you need, home products like appliances and even paint. I was talking to my friend yesterday and he said that they ordered their paint and it took him like 60 days to get the paint.

Joey: Wow.

Josh: And I don't know if that has anything to do with the supply chain, maybe there was a warehouse that burnt down somewhere, I don't know, but I just know that there's major issues with supplies, and I think that's putting its own pressure on the ability to supply the market. And you know what, honestly, that might be a good thing because it's certainly keeping us from over-building in our market. We've heard of times in the past where other markets have overbuilt big time and it dragged the whole market down because they over-supplied. We haven't done that here.

Joey: We're going through a remodel right now, I mean like a major remodel, we almost doubled the size of our house, and at every point it seems like there's been a supply issue, just product... We have a really good general contractor, I guess I won't name him because we gotta name everybody, but he talked about how juggling the projects, but it was... He would make comments like, he was surprised how long... How many weeks out with just a simple product.

Josh: Yeah.

Joey: Like a toilet.

Josh: Yeah.

Joey: Something like... I think my wife picked a couple of sinks and I went down and picked them out, and then they called back and they said, "Oh yeah, we can have those about seven months." And she's like, "What?"

Josh: What's my other option?

Joey: Yeah, it's like "Show me sinks that we can have within the next few weeks." So we're a few weeks behind, but we also dealt with issues with permits and stuff like that. It just seemed like every step of the way was pushed back a little bit, and I really don't think it was the contractor, 'cause his communication level was so high, and so I just think you're right, there's a lot of supply chains that are disrupted. And we had an issue with the paint too, where they're just like, "Oh no, that one will be months out." So when she went to choose the paint, they gave her guidelines and she said, "Hey, what can I get now?" "Oh, okay, well, then only look at these." The same thing with appliances, and we even got a couple of furniture pieces, I was shocked. We went in there and they're like, "Oh yeah, you can have that in a year." What?

Josh: And put that at scale. Imagine you are a contractor that has to develop 40, 50 homes in a year. I mean, think about all those disruptions where you have a great supplier, but all of a sudden that supplier's supplier is now disrupted, and so now your go-to supplier is no longer reliable and it's just... It's a challenge.

Josh: I think if we go forward and look at the next two, three, four years, I do see there's an opportunity for us to see some construction here at a meaningful level. And I suspect that with the demand that we have coming from Sacramento, the Bay area in Southern California, that a lot of that is justified. I think we'll be able to fill it. I think there's a lot of homeowners that are currently living in homes now, that they're looking around going, "Well, I have to make a decision to remodel my home, or if we want, we can go pick a new one." And if there was enough of those new ones out there for them to choose from, they might make that choice instead, and so they buy a new home that now provides a resale home to the market as well. And it's a healthy, healthy thing when new construction is being added to the existing housing supply. If anything, it's gonna help us to stabilize the appreciation piece, because seeing appreciation jump as fast as it has is gonna price our children out of a market that we don't want them to leave.

Joey: That's one of the things I think about is that everyone is very excited... Well, if you're a home owner, you get very excited when rate...

Josh: Home appreciation.

Joey: Yeah, it goes up. Thank you. But as the younger home buyers, that's not... Or even people that are thinking about... I've heard a couple of people, like, "Well, I was thinking about selling. But then what do I buy?"

Josh: Yeah.

Joey: They wanna downsize...

Josh: Yeah.

Joey: They wanna... The kids have gone off to college and they're like, I kinda want a smaller home...

Josh: Yep.

Joey: But they're like, You sell, but there's really no inventory. I know there's inventory, but as far as like, numbers go, I think in your market update, you were talking about, our numbers are pretty much...

Josh: Just over 600 homes right now.

Joey: And last year it was just over...

Josh: Well, it was a little higher. About 700, but yeah, it's pretty similar. The whole last 12 months... 18 months since COVID has been... The inventory has been depleted.

Joey: Yeah, so is 600 a healthy inventory or...

Josh: No. No, not at all.

Joey: What do you think a healthy a inventory is?

Josh: Probably a 1000 to 1100. And we talk that right now based on sales volumes.

Joey: And we talked about how there could be, with the forbearance programs and things that are happening, that we might see some inventory hit the market, a large volume of homes hit the market, so.

Josh: Yeah, in one form or another, they might be just regular sales 'cause they have equity. Or they might be a short sell if they didn't have it, any equity, and worse case scenario, foreclosure. And there's gonna be a portion of those, that distressed property from our last video that's gonna be there. I don't think it's gonna have a massive drag on the market because, even if half of them came to the market, it's not large enough to be life-changing in terms of what prices will be. But if you were to describe this perfect housing price appreciation in the market, it would be really 2%, 3%. It would be a...

Joey: You track inflation?

Josh: Yeah, stay ahead of inflation just a little bit... Not today's inflation. [chuckle] But normal historical inflation, because if prices go up about 2% or 3% a year, after about three or four years, you could choose, if you wanted to, to sell your home. You'd have the equity necessary and probably have enough money to, We'll put something down on the next home. And that's what you really would want, is... 'Cause then people every three or four years have options if they choose to take them. You know what I mean?

Joey: Yeah.

Josh: That'd be perfect. You wouldn't wanna be too much faster than had an appreciation, because, like we talked about, you want your children to have the capacity to purchase a home and stay in the community that they grew up in, right? You want the person who provides professional services, and even just regular blue-collar services in a marketplace, you want them to be able to own a home as well, so they stay. You want everybody to have some level of an American dream, and it's based on merit, of course, but you still wanna provide some ability that when you do the right things and you work hard, you should be able to own a home. And that's what I love about Redding right now, is that we still, for the most part can do that.

Joey: It's still affordable.

Josh: It is. I don't mean to disregard anybody that's not able to afford a home, because we feel for that too, and we wanna see that gets solved. But the only way that's gonna get solved as if we add homes to the inventory.

Joey: So if someone was coming to you and said, "Hey, we're thinking about building versus buying." Do you point him in a certain direction?

Josh: Well, right now, building versus buying is interesting. I would suspect that... You can obviously build and for equal to what you can buy an existing home for. And the only proof of that is in the fact that builders right now can build a home and sell it on the market, right?

Joey: Got it.

Josh: So you can do it, but there is time involved. So if you're thinking today, I might wanna build a home. It's probably... If you even got started today, it's probably gonna be about a year out, and it could be as even as far as maybe a year and a half. And that's what most people doing all the things right the whole way through. And that's because of the things we talked about. The supply chain disruptions, the lack of labor, how long it takes to get things done. So first thing to think about is, how long will it take, right? The next thing you're gonna be looking at is, a lot acquisition. Are you buying in an existing neighborhood with a lot sitting there waiting for you? Or have the developers got the plans already ready for you? Or are you gonna go out and find a lot on your own? That takes time. And so it's totally doable, but if you haven't done it before, you're definitely gonna wanna pair up with a really reputable builder. They should be able to help you through the process of designing a floor plan... Share with him what your budget is, so you can design a plan where you get what you want for the price you want. All those pieces are gonna be a big part of it, if you're gonna make that decision, but it takes a while.

Joey: Do you think it's a good investment right now? Do you think that... 'cause I...

Josh: Yeah...

Joey: One thing would be, Hey, I wanna do this because I have my dream home in my mind. And so I want this exact home.

Josh: Yeah.

Joey: And you go, "Okay, then you gotta build it." Or the other would be like, "Well, I'll make equity, because I'm building, even with a general contractor, I should... "

Josh: Yeah.

Joey: That certain percentage, right?

Josh: Yeah, [chuckle] the word "Yield spread premium" comes to my mind, but that's not a great way to describe it. But are you saying, Is there a clear benefit to building over purchasing existing homes? No. There is no financial clear benefit.

Joey: Really?

Josh: No, it's probably slightly more expensive to build a new home, than it is to buy an existing one.

Joey: Wow.

Josh: So you don't think you're saving in a ton of money in that way... But look what you get in the trade-off for it? You get a little bit of a house that's more along the lines of exactly what you wanted. It's new. So it comes with the benefits of less maintenance and repair in the next 10 years.

Joey: Roof, HVAC system...

Josh: Yeah.

Joey: All that stuff...

Josh: Yeah.

Joey: Doesn't need to be replaced in five years.

Josh: So there's... Exactly, so there's some built-in conveniences that you get by buying new. And so, maybe on paper it's slightly more expensive, but maybe over the 10-year period, it's not. But I wouldn't say that it's a no-brainer to build right now versus buy.

Joey: Are we seeing anything, outside of single-family home construction going on, I've always heard that Redding doesn't have enough... I don't know if the term is low-income housing or what the proper term is, but basically like multi-unit. That's always been a big dig on Redding, that there's... I don't know what that percentage is that they use, where they say, "Hey, this is a certain percentage... "

Josh: Higher density.

Joey: Higher density. There you go.

Josh: Yeah.

Joey: We're not seeing any of that, right? I don't even know if we have enough zoning?

Josh: Well, the zoning isn't an issue anymore. The state of California passed a couple of laws where they're basically for pushing back on the cities and saying, You have to actually increase your density for the housing, because they don't wanna be in a situation where the housing market gets too out of control. So it's now giving the cities the flexibility to increase their density zoning, even when the general plan originally didn't outline for it. So that's been a change that's taken place. We are seeing some higher density here. We have four or five major apartment complexes that are being built right now just on the west side of town, so. One of them just got completed. There are several more going up. So, there are some higher density units that are coming in. We have some cluster home developments that are coming in. This is where they're like attached living, so you have your nice townhouse and it's attached... One wall is common with the town house next door. And so we see a lot of those cluster homes coming up as well. There's one that's coming up on the west side of town as well right now. There's a couple of bigger ones on the east side of town. And so I do see that happening now. And really the general plan kinda looks like, imagine a large arterial road. Is that the way to say that word?

Joey: Arterial?

Josh: Arterial. Thank you. And so you see that road coming through. So that first layer is higher density, right along with that road. When you get further back, it starts to drop into a lower priced single family dwelling. And then in the back of that area, would be a higher-end single-family dwelling. And so we're starting to see that kind of pattern up and down the state. So arterial road, higher density right next to it, then smaller single family, and then larger homes behind that. And I think that, that's kind of the game plan I see at a lot of the general plan looking like.

Joey: I wasn't aware of all that. The multi-unit... I just notice that... I always check multi-units for sale. So it's one of those things I like to check and you see almost nothing for sale.

Josh: They're not selling 'em.

Joey: Yeah, they're not selling them.

Josh: Yeah, no, no, they're being built to hold... Some of them are using state money, and so a portion of it maybe will be like a low rent a scenario, whatever that means, 'cause I'm not gonna [chuckle] talk about the project, but I'm looked at one recently, I'm like, "That's called low rent? Wow, okay." But [chuckle] there's some people are tapping government money to do that, but a lot of those bigger ones that I'm referring to, they're not being built on speculation and then sold to the market. They're being built and held, and probably will get occupied, establish a cap rate, and then maybe at that point, if they decide to, they might sell it at that point and exchange somewhere else, but no, I think the people you're seeing right now building are holding them.

Joey: So, do you wanna talk about the cap rain at all? Is there like a cap rate that you'd say is that the Shasta county cap rate?

Josh: I talk to folks that are down in the Bay Area, in Southern California. And it seems like their cap rates are averaging on the really low end, and I don't know why they do it other than future appreciation, but 1% and I see them as high as maybe 3, 3.5%. And that's pretty normal. For them to find more than that, it's that highly educated investor that knows how to find the deal, right? But for average investors, I'd say 1-3% down there. Up here, you're seeing cap rates that are about 5%. And they go up from there. You see them 7%, 8%, 9%. But it really depends on the condition of the property. So our newer inventory, the newer stuff that you're gonna find... And if you get a good buy on it, you might find a cap rate at 4.5%, 5% on new stuff or newer stuff. As it gets older though, that cap rate starts to go up and it looks like a better return on paper, but that's because it's gonna come down the road with more maintenance and repairing and stuff like that. We have investors looking up here, because the cap rates are more attractive than bigger cities. And if they're expecting a return, a place like Redding is an option.

Joey: Does the cap rate usually rise by the number of doors in the units?

Josh: It could. But it really has to do with how much money are you putting into this project, right? And then what is your net taxable income when it's done and the reconciliation between those two numbers essentially is how you're gonna establish your cap rate.

Joey: What about that whole four-unit to five-unit step, because a four-unit or less is a residential loan. So it just looks like the four unit... Oftentimes, I see a fourplex, that's more expensive than a fiveplex.

Josh: Yeah.

Joey: And I think it's because...

Josh: Quadplex tax credit.

Joey: Yeah, the availability to finance it versus the second you go to five doors, it becomes a commercial loan...

Josh: Yeah.

Joey: Rates go up...

Josh: Yeah.

Joey: You have to put a much larger down.

Josh: Yep.

Joey: A young person... You don't have to be a young person, but a young person starting out could... Their first purchase could be a fourplex. They live in one of the units and say, "Yeah, this is my primary residence."

Josh: Yeah. I've met clients over there that have done that.

Joey: It's genius. It's brilliant.

Josh: Yeah, it actually is, because you're getting it with less money out of your pocket. You're... 'Cause you can buy them for much less than what you buy an investment property for. And then when you go and you purchase it, now you're renting out the other three, usually almost always covers your own personal rent, so now there's no expense to your living expenses at all. And you're building equity. It's pretty incredible that but your point there is really well-taken that up to four units, you can use FHA financing, which means that you can increase the amount of buyer demand for your property. As soon as you go to five, the down payment goes way up, it shoots way up, because now you're into a non-conforming product. And when you're in that zone, the investor pool, you're getting rid of all the other folks. And now you're only with investors, essentially, that can purchase that property. So it narrows the market. And that's why you could see a fourplex selling for more than a fiveplex.

Joey: I don't know how commercial loans work, but in the past, when I've dealt with them, it's like they also want a much larger down payment. You know what I mean? I think it's 30% maybe? You might...

Josh: On average. Yeah.

Joey: Yeah. And then on top of that, as I said, the interest rates are... I think when residential rates were in the low threes, I still think the commercial was five...

Josh: It was.

Joey: It was five-plus?

Josh: Yeah.

Joey: And I think in our last episode, you talked about 1% interest rate reduces your buying power by 10%. So you can see why right? Is that about right?

Josh: Yeah, so for every 1% the interest rate goes up, the purchasing power goes down by 10%. So if you qualify at $400,000 at 3%, if that rate then goes to 4%, now you only qualify for a $360,000.

Joey: Now, it makes sense why you'll go in and you'll see a property that's four fourplexes parked...

Josh: [laughter]

Joey: Side by side and they're like, why didn't you just build a 16-plex?

Josh: Yeah.

Joey: It's like, 'Cause I can sell these four, four...

Josh: Correct.

Joey: The amount I put...

Josh: Yeah, they're probably on four separate lots and have the ability to be financed differently. You have access to credits a lot differently. And that's probably a smart move. Absolutely.

Joey: So you're comfortable with the level of new construction. It's buying it, staying just a little bit underneath it, kind of as a safety net for those builders to not over-build. You're comfortable with the level of commercial building that, with the projects we have, what is the marketplace moving forward if we're underneath our inventory, isn't that just gonna cause the appreciation rate to be much higher than you think? If we do get to where inventory meets and exceeds, we're gonna see a drop, right?

Josh: Yup. And I think the best way to describe it would be... 'Cause absorption rate is really what it is. A healthy market's gonna be about a healthy market, about four to six months supply of homes, meaning that it would take four to six months to sell the existing inventory if nothing else came up for sale on the market. Our inventories are too low right now, 'cause our absorption rate right now is probably sitting at 2.5 months supply, that's why we're appreciating so fast. But as people start to get moving again, as the supply chain starts to get moving, as people start going back to work, as people feel more comfortable with whatever this pandemic thing is now, whatever that looks like, you'll start to see our inventories begin to grow out of this. I expect this spring that we're gonna see our inventory grow.

Josh: Will it grow really fast? It's hard to tell. But if it does grow, that means our appreciation is gonna begin to taper off, and that's not a bad thing. For those that are thinking, "Oh that means the crash", it's like no, it just means that we're hopefully transitioning back to a more stable and slow steady growth real estate market. We don't like big swings in real estate, it affects people's lives too much. It's much safer, it's much more comfortable for people when there's just slow predictable, steady growth.

Joey: When was the last time we had that?

Josh: Not very often man, 20 years. I think I saw the tail end of it in 2000, 2001, 2002, and then by 2003, started to turn into a pretty crazy market, and it's been bouncing really bad ever since. But prior to that, if you looked it looked actually pretty stable. It's interesting, I wonder if it has anything to do with policy too because it seems like the more that the state has implemented a policy in the housing market, it's really begun to disrupt inventory. And if the Bay area in Southern California were able to increase their housing supply or have some more flexibility with expanding out to other areas in places like Redding could do it with a little lower cost, the housing issue could probably solve itself. For example, I talked to somebody before and I said, "You know if we went back to the building standards of 1992, and just did that for homes up to 1500 square feet, and we said we're gonna do that for the next 36 months. Do you have any idea how many homes would be built on the lower end?

Joey: A lot.

Josh: A ton, because the cost would be so much lower, right? They wouldn't be dealing with all that out of regulation. And so within 36 months, you could have... Not saying it would solve all the problems but it would be to be a meaningful contribution to solving that housing issue. But I'm not going into the weeds there, I'm just saying that the way that the government has an impact on a policy does have an impact on how many homes get built.

Joey: Well, I think a perfect example of policy impacting the market was the capital gains laws that changed in the late 90s which said a married couple can wave up to $500,000, a single person can wave $250,000 on your primary residence if it's been your primary residence 2 of the last 5 years and you can do that unlimited number of times. At that point, you really turned up the flipping of buying a new house every three years.

Josh: Yes.

Joey: Especially when you combine that with an appreciation market and easy money, the next word that went to my mind was a casino.

Joey: I said, "Wait, did they just make a casino? Three sevens, yes." So, I think that had a huge impact, right?

Josh: Well, in all these things, there are so many different variables now that have an impact on market valuations. And I think that's part of the challenge is now when I look at what the government's doing... I'm not taking a position left or right or in the middle or anything. I'm literally in a policy and going, "Okay, with that policy this is probably how it's gonna play out on Main Street so that it can be well advised on how to both help our clients but also for our own investment portfolio, what moves we need to make."

Joey: Well, can you imagine if all primary residents, had to pay 15% capital gains? You don't think that would slow...

Josh: That'd slow the market down.

Joey: Slow the market down. Versus, "Hey, let's sell it and buy a boat and buy another house." I think that absolutely has nothing to do with left or right either, it has everything to do with just the policy and...

Josh: Yeah, it controls behavior, it has an impact on behavior.

Joey: Absolutely. And our access to money, and I wonder how that's gonna play out. I bought my first house, I think in 2001, and I think I got 7% and that was really good at the time. And money has been so cheap for so long, and I don't see any really stopping that. It's almost like it's the new norm, right?

Josh: I think so. We're not wise enough and old enough not now to see 80 years into the past. But when I got in the business interest rates for FHA were over 9%, and right now they're in the low 3s. So, and I've seen it this low for a long time now. For them to raise rates is actually a pretty scary thought for me, because most people purchase homes based on what they can afford for a monthly payment. And so, whatever the rate has an impact on what the purchase price is gonna be. So if rates went up to the 9% that I'm saying that I had 20 years ago, that would have a significant impact on what people can qualify to purchase and that would immediately drag the market down. So, no idea. All I know is that if they really can't raise the rates back to the old days. It's just not something that can be done without having a significant consequence.

Joey: Yeah, no. And that's another example of policy and that's something that's transcended whoever's been in the White House or whatever that's been for almost 15 years now, it's been super low. Well, Josh, thank you so much...

Josh: You bet.

Joey: Today, I appreciate that. So, if someone's thinking about building or buying, that your phone number is gonna be listed. They can call you directly and ask to get your advice.

Josh: Yeah, just type it into Google or go to reddinghomes.com if you wanna see any of that stuff.

Joey: Awesome, thank you, Josh.

Josh: Yeah, you bet, and thank you.

Joey: You have a good one.

*

Posted in Podcasts
Dec. 1, 2021

Shasta County Market Update - December 2021

 

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

 

From the Desk Of Josh Barker

First and foremost I hope that all of you are well and enjoying time with friends and family this Holiday season. The surrounding mountains are snow capped and the colors in the trees are an amazing treat for all of us here in the North State. For those of you that are out of town reading this newsletter, come and visit us in the North State soon! I would also like to take a moment and thank all of you for your continued support and feedback regarding our monthly newsletter. Our viewership has just surpassed 20,000 and our commitment to bringing the local real estate news to all of you has never been higher. This month we will briefly touch on several of the hottest topics trending now in our local market. If you have any questions, please do not hesitate to reach out by responding to this email or contact us at the office at 530-222-3800. Happy Holidays!

MARKET UPDATE FOR DECEMBER 2021

Home Sales

Home sales in the month of November finished at 255 closings similar to last month, and slightly higher than the 259 reported in November of last year. The reduced volume of home sales in the local market over the past several months is leading many to believe that the market is transforming into a more normal and balanced market. 

Listing Inventory

The number of active listings for sale in the local market is currently hovering at approximately 635 listings for sale, down slightly over last month which reflects the normal seasonal change. Although the inventory remains lower than last year, it has continued to trend up since the lowest point in March of this year when inventory hovered around 465 properties for sale. The recent inventory increases are a welcomed addition to the already depleted housing supply. 

Buyer Demand

The number of buyers shopping for homes has decreased in recent months. Earlier this year it was common to see 10-15 offers on a single property. Today, these same types of properties may only receive 1-3 offers.  Although the home is sold in either case, this recent trend is revealing that the market is beginning to cool off. We expect to see clean and well priced homes continue to sell quickly, but the days of "testing the market" are numbered if this trend continues.  

Rental Market

The rental market continues to perform exceedingly well. Many property management companies are sitting on low inventories and vacancy rates are extremely low. The cost to rent has continued to climb in recent months and this trend is expected to continue as properties become vacant and are re-rented. If you or anyone you know is planning to rent, start your search early. The low rental inventory could prove to be more challenging than expected. 

Home Price Appreciation

The average price for a home jumped an eye catching 17% over the past year in the Shasta County market. Local homeowners are sitting on more equity today than at any other time over the past 10 years. The rate of appreciation is beginning to cool off and most home price expectation surveys are projecting a 5% appreciation in 2022, assuming there are no major economic disruptions or interest rate increases.

Mortgage Rates

Mortgage rates have trended up slightly over recent months and are currently averaging 3.25% for a 30 year fixed mortgage. The Federal Reserve has recently stated they intend to raise rates half of one percent in the next year which could translate into a 3.75% interest rate for a 30 year mortgage by the third quarter of next year. Keep in mind, for every one percent that the interest rate increases, the borrower's purchasing power is reduced by approximately ten percent.       

 

Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. Please feel free to contact our office with any additional questions you may have. 530-222-3800

 

 

 

 

Learn more about Josh Barkers 5 proven steps to selling your home by visiting 

reddinghomes.com/selling-your-home/ 

Learn more about Josh Barker's proven ideal investment formula by visiting

reddinghomes.com/buying-home/

 

Check the average value for your home instantly by visiting reddinghomes.com/home-value

 

Make it a great December! 

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. 24, 2021

Josh Barker Real Estate Podcast Episode #1

🏠💰Home Value Tool➔


Frequently Asked Questions

Can a bank foreclose if you make partial payments?

The short answer is yes. A partial payment is considered a breach of contract and could lead to negative impacts on credit, a formal notice of defaults and eventually foreclosure. However, many banks may choose to work with a borrower who is experiencing a short term hardship through the use of a forbearance or loan modification program. Proactive communication with the lender is a positive first step.

Will house prices go up in 2022?

According to the majority of economists, the housing market is projected to appreciate an average of 5% next year. Major disruptions due to inflation, employment, and interest rates are the largest factors to be considered.

What will house prices do in 2022?

According to the majority of economists, the housing market is projected to appreciate an average of 5% next year. Major disruptions due to inflation, employment, and interest rates are the largest factors to be considered.

What are the steps in foreclosure processing?

Typically the lender will first issue a 30 day late notice followed by a 60 day notice of default being filed on the property. Next the lender will issue a notice of intent to foreclose followed by a notice of trustee sale. Finally the home will be offered for sale at an auction and if not sold will be repossessed by the bank. There are variables that could impact the length of time to foreclosure but the process typically averages 6 months.

Do banks really want to foreclose?

The short answer is No. Banks are in the business of loaning money. However, banks have a fiduciary responsibility to shareholders, and must answer to government agencies in regards to monetary policy and compliance.

Do banks lose money on a foreclosure?

In many cases banks due in fact lose money foreclosing on a property. The financial impact on a bank can be costly due to the lack of loan performance, the condition of the property deteriorating, the cost of maintaining or repairing the property and of course the cost of legal fees. For these reasons among others, typically a bank would prefer to work out a reinstatement of the loan, a loan modification or a short sale option to avoid foreclosing.

How much are banks willing to lose on a foreclosure?

Typically, there is no set amount that a bank is willing to lose on a foreclosure. Banks utilize a variety of factors to determine an acceptable loss. These factors include but are not limited to the current market value of the property, the length of time necessary to liquidate the asset and any other legal considerations.


Transcription*

The transcription is auto-generated by a program and may not be accurate to the conversation. In order to ensure you get all the information from the video properly, you must watch the video.

Joey: Okay, so the local market has slowed down a little bit...

Josh: Yeah.

Joey: I mean that's... But it's also going in the holidays, I would say every year. It kinda slows down a little bit.

Josh: Yeah, there's a season to it.

Joey: It hit a peak in the summertime, around August. One of the things that we're seeing, and I don't know if that's related to the local market, but we saw Zillow who was gobbling up real estate, not only did they stop that, but they laid off... I think it was like 2000 employees. It was a very large number. Yeah, it was a huge number. It could have been 20,000 but it was significant enough that it hit headlines pretty hard, but what does that? Did that have any effect on the local market here?

Josh: No. The short answer to that, no, that didn't. In fact, I was watching some realtors running and posting on Facebook and everything else, "Oh my God, Zillow is not buying... IBuying anymore." And I'm like, "You know what? In Shasta County, there's no reason to freak out about it, 'cause Zillow wasn't buying homes in Shasta County." So it was not a big event when they stopped buying, but essentially what it was, is that Zillow was participating in the iBuyer market, which is where they're buying them with... Institutions are buying in these properties with the intent of just to resell them... Flip properties essentially. In some cases, they would fix them up a little bit and do a small little face left to him and re-market them to the market, but as a whole, they were trying to offer a value, which I think was well-intended, but the second you start buying an investment property or buy a property in general in any market center, you are an investor at that point. And Zillow wasn't really an investor to start with, they were in an advertising company, specialized in advertising products online for buyers and sellers to communicate with.

Josh: So what happened was, is that essentially they realized their Zestimate was inaccurate, that they were buying them for too much money. And that when they went to try to resell them for what they thought the Zestimate was reflecting, they couldn't get them sold, so then you had a lot of inventory sitting and in some cases being price reduced below what they even bought them for in order to get them off the books, and so I think they... They're publicly traded, they have to answer to their board, but they also have to answer to their investors, and they said, "We need to stop the bleeding," and made a smart decision of, "You know what, maybe we need to re-look at this." And so they made a decision to stop iBuying, which I'm sure they probably still have some commitments, I'm sure they're probably still closing on some of those transactions that they had already committed to. But they're winding it down. And it's probably a smart thing to do. I mean, an institutional investor buying to flip will never outmaneuver, outperform a local investor who really understands the lay of the land. That know... Real estate's local, people have always heard that. And it's true if you don't know all the little intricacies of a property or an area or a subdivision or what that type of buyer is searching for, you could get slaughtered out there and they did... They got, what, 500 million or more?

Joey: When you said that, what I immediately thought of was back in 2007, 2008, when they had the mortgage back securities and they were gobbling them up, but yet credit unions didn't have any problem because there were individual little credit unions that analyzed each loan and they wouldn't give out the bad loan.

Josh: That's right. Or...

Joey: Whereas the institutions were just gobbling up mortgages.

Josh: Yes, yeah, when you took comparisons of different assets... The credit union, to your point, did get hit a little bit, but it wasn't initially, it wasn't because of bad loans, it was because these bad lenders drug the market down so far that even the good loans that they provided were underwater, that's why that market was so exasperated. This market this time isn't like that... I've had a lot of people asking like, "Hey, are we in a bubble?" Those kinds of things. And it's like, "Well, I'm not saying that we won't see the market correct a little bit," because any time you have a period of a major increase over a period of time, and any time there's a breakthrough in pricing, which we've clearly had... We've had 10 years of major growth...

Joey: Yeah.

Josh: Well, after long periods of growth, there's always some sort of a pullback, some sort of a recession, so it'd be kind of irresponsible to say, "Oh no, not this time." But the good news is, is that the buyers that we see coming, they're purchasing on 30 year fixed mortgages, which means there are no balloon payments, their interest rates are extremely low, which makes them wanna stay in those properties and hold those properties, there's hardly any negative amortization or interest-only products in the market, so we don't have a lot of those issues to deal with. And the investor participation is really low. We're probably talking maybe 10% of the markets investment-related in Shasta County.

Joey: Really?

Josh: Oh yeah, yeah. And before it was almost 50% in that 2007, 2008 that everybody knows where that market just got hammered, it was because in those periods, major investor participation where today it's 10%.

Joey: So you think maybe the... When you say it like a market correction, are there any numbers that come to mind percentage-wise, or any length of time or... I know it's like, Hey. Do you have a crystal ball? Can you tell the future?

Josh: Yeah. I'd be retired. Completely if that were the case. But I think what it is is after periods of market expansion for a period of time like I said, I think you could expect to see some retraction. You have another way of investors look as we have tailwinds and we have headwinds. So tailwinds, what are the things that'll push the market up? Well, you have family formation, you have migration, you have wage growth, you have a lack of inventory, you have monetary policy that's easing and that's pushing the amount of pay up where people can afford more. You've got the cost of construction, if it's really high, then that pushes the existing inventory up in value too, if you have a lack of labor, that again can cause prices to get pushed out because you can't really replenish the needed supply. So right now our... Let's say our tailwinds right now are hovering at 7-8%, which are all positives, right, and then you have to... That's your tailwind. And then you look at the headwind, it's like, "Okay, well, what could push pricing down?" And one of them would be as if people were to lose their jobs, if we went into a major recession when people weren't getting jobs, well, then that would reduce the buyer participation and that could have an impact on value.

Josh: Do we see that today? Not really, they're even paying people to stay home, right?

Joey: Yeah. Not locally anyway.

Josh: Yeah, locally. And then you have interest rates, so interest rates are sitting in right around low threes, and the fad is said that they probably would see maybe two rate increases in 2022, and every time they increase, it's only about a quarter basis points, so next year they said, "Hey, rates might go up a half a percent." A lot of people don't know this, but for every 1% that the interest rate goes up, it has up to a 10% impact on your purchasing power. So if we know that the interest rates will likely go up 10% next year, which with inflation where it is, I'm sure they're going to go up, that could have an impact of about 5% on the value. So if you have a tailwind of 7%, you got a headwind of 5%, that means you have positive growth and value of maybe 2%, and that's how those things interact with each other. Does that make sense?

Joey: Totally.

Josh: Yeah. And whatever ingredients you wanna throw in the cake on the tailwind side or on the headwind side that's up to you and every investor, that's where the speculation comes in, but the principles are settled.

Joey: 'Cause I think one of the big factors would be... You said migration, and it just seems like there are a lot of people that are pouring out of the cities, and Redding is still... When you talk about California real estate, Redding is definitely at the lower end cost, it means by quite a bit...

Josh: It is. Yeah. Which makes it attractive.

Joey: Makes it very attractive.

Josh: Yeah. We're seeing a turnover a little bit, if you will, in our population. The composition of our population is changing a little bit. So you've got folks that are moving out and moving into Idaho or Texas or Tennessee, and we have families, mother, father, the children, and they're married off with kids. We have families coming in right now and saying, "Hey, our whole family is moving to another state." It's pretty... In 20 something years, I've never seen that before. And we see some of that right now. And then also on the flip side of it though, we see people moving up here from Sacramento, from the Bay Area, from Southern California, who are saying, "Gosh, we love California, we love the weather, we love the proximity of the big cities were Redding... Love the outdoors that Redding has to offer and we really like the price." So it's interesting, we're starting to see a little bit of a change in that composition.

Joey: Do you think that at any point we're gonna see like foreclosures or are we gonna see... I can't remember what the term is, but... 'cause we're being pretty positive right now, we're saying, "Hey, the whole Zillow thing really doesn't affect Shasta County because they never bought here anyway," but is anything gonna turn because... Is it all just roses?

Josh: Wouldn't that be nice, right? No, it's not all roses. You've got the pandemic-related impact that we're not talking about, and that's a pretty sobering conversation because no, there were people that understandably fell behind on their mortgages due to employment disruption and things like that, or even sometimes it was landlords who had a rental property and the tenant stopped paying, 'cause they had a disruption in their cash flow and well, now the landlord was expected to burn the responsibility to continue to make payments to the bank and they couldn't do it. So you have some distressed properties in the market. Right now, we have an estimate of just over 2000 property owners in Shasta County who are a period of time behind on their mortgage, and some of those are in a forbearance program, which expired at the... In the summer. And so some of these folks are in a situation or they're gonna have to make a decision, they're gonna have to decide, "Do I modify my loan with my existing lender, if they'll let me and maybe tack on what I didn't pay onto the back of the loan and pay it back over time? Or do I refinance my property based on whatever the criteria is that a lender is gonna require in order to start over again with my loan balance and get current?

Josh: And there are some programs I know of that are available for that. Some people might choose if they have equity in their home just to cash in, "Hey, it's time, we might be behind in our mortgage, but we have some equity still we're gonna sell our home anyway." Some are going to decide to do a short sell if they don't have the equity, so they can control when they close and how they close and kind of minimize the damage to their credit, and then unfortunately there'll be some that will ultimately possibly lose their home and go to foreclosure all the way. So we have reconciliation as a community that we are going to have to go through, because if those numbers are correct and it exceeds 2000 that are behind, a portion of those will get fixed and corrected and never reached the market, but there'll be another portion that will reach the market in one form or another.

Joey: So 2000, that number sounds really big to me, we're talking about Shasta County, that sounds like... That's a shockingly large number to me. I guess the good news is, if you are in that position, you're not alone and you do have options, and when you said equity in your home, I'm thinking, "Man, if you purchased your home more than two or three years ago, you should have quite a bit of equity." We've seen this market do very, very well over time, definitely for the last 10 years, but even over the last three years, the market has performed very, very well, so you shouldn't be upside down. There might be a... But I think that's gonna be a very small fraction of those people, so get ahead of this and do something about this now, so it sounds like they need to get in touch with either a real estate broker or if they need to get in touch with a loan officer. Find out where they sit. Get their options now.

Josh: Yeah. I agree. I think that if a person was in that situation, the very first thing you wanna try to do is figure out what is the actual value of our property right now, and there are means to do that...

Joey: Don't use Zillow. Don't get a Zestimate.

Josh: Don't get a Zestimate. On our website we have a place where we can check your value, you don't have to sign up for it or anything, it just will give you the value at that in there, but it's still only computer-generated, so it's not gonna be better than having an agent look at it, but it's still something. And I agree, I think you try to figure out where, if you have equity or not, ask yourself the questions. Do I wanna sell my own and cash in on the profits that there are now? Or if I'd prefer to stay and then go down the route of check-in with a lender and see what your options might be? Like I said, sometimes you can modify it along with your existing lender if they have a program for it. Some are right now, because of how many people nationally are going through this, lenders actually have some policies in place for if you have to check with each in the lender individually, but I know that I've heard that if you make a couple of months payments in a row, that then you can qualify for a refinance and so are some options...

Josh: The worst thing that somebody could do is just to put their head in the ground, we saw that last time, and that major... This isn't anything like that. But when we saw that for a closer market, we saw before, the ones that really got hurt the most were the ones that put their head in the sand, because by the time they finally wanted to do something, the protections that were awarded by the government were no longer there anymore. And that was the big price to pay for putting your head in the sand. Were the ones that kind of were proactive and working with the banks or doing a short sell or foreclose or whatever it was that they were trying to figure out, when they were proactive, they were going with the group, and with that comes some protections because, in numbers, you have some protections when you're by yourself, they're not gonna carve out a policy just for you, but they will when there are thousands of people that are in that situation.

Joey: And it sounds like there are thousands of them. When you said there are about 2000 homes that are in this, like at some point of this forbearance or there just behind, are you talking about people that have just missed their mortgage? What triggers as like they're two months are more behind or is it... I'm trying to get a context of how close those people are too, like, "Hey... Urgency."

Josh: Yeah, well, the... My understanding of it is, is that the current reporting agency is once you're 30 day late, they could report it is 30 days late, but because we're in that foreclosure moratorium, there was no... They wouldn't file a notice of default, for example, after 60 days. They didn't have the legal means to do that because that was the very thing that was suspended, but it didn't mean that you didn't have somebody tracking the fact that you're behind on your mortgage, and so I think that's where that information is coming from is that they're basically saying, "Hey, here's the number of people that are behind currently," it doesn't mean they're all gonna foreclose, it just means that these are the ones that are behind, and it's a number that will have to be rectified either they'll have to refinance, they'll have to do some sort of a modification to their existing loan or they'll have to sell it in some way, whether it be an equity sell or short-sell or foreclosure.

Joey: Do you think that that's gonna... 'Cause that sounds like a headwind to me based on what... How do you define a tailwind and headwind, if all of a sudden the market gets this huge number of inventory, do you see that having an effect on depreciation next year?

Josh: Oh yeah... Well, again, everybody's ingredients that they wanna put into a tailwind or a headwind is up to them, that's where the speculation comes in, and yes, from my own personal speculation in terms of the market for next year, that will be counted as a headwind.

Joey: You know, one of the other things, I think that we talk about markets... We're too generalizing when we talk about markets like the national market's one thing, the California market, the Redding market, but even within the market, there are market segments, and I've had friends that were looking to buy and looking to sell, and they're certain segments... I guess it's like stocks, just because the market went up 4% today, it doesn't mean your stock went up 4%, you might it went up 24% it might have gone down 4%. And so there's... Is there a particular segment, do you have those kinds of numbers, you're like, Yeah, out of those 2000 homes, the price is this, and so these are the segments that we're gonna... 'Cause I think of a bunch of inventory at $350,000 is not gonna affect home sales at 800,000 and vice versa.

Josh: That's a really good point. So obviously the... Well, the average sales price in the market, to your question is between... It's averting between 390 and 400. Really? Yeah, and it trans down in the fall, in the winter, it always does, 'cause fewer larger homes sell during the holidays, that's just... They're the ones that are doing all the entertaining, all the kids are coming to the big house, so the upper-end market tends to not have as many closings, which has an impact on the average selling price and the fall in the winter, and then that starts to change in the spring. The price point that's pretty much active year-round is the lower price point, so anything that's at that 350 year below in today's market, at that price point is going to move regardless or respective of what time of the year it is, and that's where most of the appreciation consequently actually took place during this whole pandemic, if you will, it's been, that's where most of the largest jumps and value off. What was interesting and COVID that... I look back and I go, "Wow," we weren't used to seeing upper-end properties sell at the volume they were selling at, that was...

Josh: That was shocking, but it was because we had people coming in from other markets like San Francisco Bay Area, Sacramento, Southern California, who were buying these expensive homes, at least expensive for us, it wasn't expensive for them, they're buying a 500 square foot Studios for a million bucks, so when they come up here and buy a 4000 square foot home with the beautiful pool for the same price, they're like "This is a no-brainer." But we've seen a lot of those transactions over the last year and a half, and that's largely being 'cause they're been second homes or people that we're able to work from any location, so they chose Redding as a wonderful destination, who wouldn't? It's gorgeous, especially if you still have to get back to the city once or twice a month for work. And so we started seeing some higher-in-price property selling, and I think a lot of it had to do with the pandemic, but what will be interesting going forward is that... Are we popular enough now? Have enough people discovered the beauty that we really do have to offer in the north state to have that volume maybe not stay exactly the same, but stay within a similar realm.

Josh: You know what I mean? Maybe it won't be the same number as last year, but if it could be 75% of the numbers of last year, that'd be still great. 'Cause, that would be a lot different than it was three years ago. We were pretty much a hidden secret up here in the North state three years ago compared to what I think we are right now.

Joey: And you have factors like telecommuting is much more popular now, COVID really impacted that. And also the Redding airport's expanding quite a bit. They've got direct flights, Vegas, Burbank, LA, obviously, they've always had San Francisco, Seattle. I was talking to Megan Spalding over at Shasta EDC, and she was talking about they wanna expand more, they're looking at like... She threw some things like Denver, Phoenix and that stuff will all have an impact on us.

Josh: Well, you'll be able to bring in a more of a working professional that needs to have the access to the airport, the biggest deterrent we have for the working professional, the travels is it's over two hours to the airport, and so we miss out on a market segment because of that, and the airport is obviously a point of attention, and I think if we have some intention with it in terms of expansion, better routes and things like that and if it's reliable. Let's not sugarcoat the reality that some people still have the stigma that it's hard to get a flight out.

Josh: Sometimes it gets canceled or whatever, everybody tells me it's gotten better, but for those who were trying to do this 10 years ago, fly out of Redding and then get burned once they're driving to stock right now. So maybe reporting those numbers, how often that they don't get canceled, that might be a good public message to get out there, but no, I think that as telecommuting becomes more viable... And they're still meeting too, it's not like these guys aren't driving back to the city or these gals aren't driving back down to the city to meet once a month, they're still doing that, so they still wanna be within a certain proximity of access to the city, but... Come on. Where would you rather live? You would try to live with... Do you have an hour and a half traffic every day that you have to contend with, or really have a five to 10-minute commute?

Joey: And a $4500 rent an apartment versus a...

Josh: Yeah, a $3500 house payment on a beautiful home that you can really enjoy. So we have... Our best days are ahead of us. For sure.

Joey: Well, that's good to hear. Yeah, that's good to hear. So you don't think that the 2000 homes that are in that are gonna impact us... People shouldn't be concerned.

Josh: Well, that... Everybody seems to be emotional these days. So what's gonna happen is, is that as soon as this conversation... Not our conversation, but as soon as the conversation of distress properties becomes more mainstream, you're gonna have articles written that are gonna try to make the worst presentation of it and try to make it look horrible. We had a rainstorm a month ago, and what did they call it? I forgot the name of it, but it was like some funny name for... It was like some cyclone bomb, is what they called it. Right. And it was like, "No, that's called rain. What are you talking about?" So you know they're going to paint a pretty dark grimson picture, but the reality is we have over 4000 homes that are selling here in the county every single year. And so let's say that even 50% of that 2000 or more end up coming to the market in one form or another, that's only a quarter of the inventory, it'll only take one quarter of a year to absorb that inventory and it's not gonna all come at once, so it's gonna get spread out, but it's gonna be... Some of it's gonna be distressed, and so there will be a conversation around it, some people are like, "Oh, finally, I'm right," but I have a feeling it won't last very long.

Joey: And they're expanding the loan... The packages, Chris Lam, I saw, he did a little bomb in video he was talking about them potentially offering 40-year mortgages, and I think you might have told me like, "Oh, they've had that around," you don't hear about it often, but it's gonna become a little more mainstream, which is only gonna open up buying power more. Right?

Josh: Yeah, yeah. For the listeners, a lot of people, when you go to take out a mortgage, you usually have a 15-year fix has been the historical or a 30-year fix. Those are the two that most people would choose from, but in Europe and in Canada, 40-year mortgages are pretty much mainstream, that's something that gets done all the time, and there's no problem with it, what I like about them or that I think makes them... Okay, is that they're usually fixed for that period of time, there's no balloon payment. And balloon payments are where you get people in trouble because you have to think as a borrower and you're like, "Okay, alright, so there's a balloon payment in five years. How do you know where you're gonna be in five years? Is the market gonna be up or down, am I really gonna be forced to refinance my property based on whatever the market conditions are at that point?" That's the problem with the balloon payment... Right, but these 40-year mortgages are fixed for the 40 years most of the time, and what it does is it brings down the monthly obligation a little bit because you're amortizing over a longer period of time, and so let's say that the fellow reserve raises rates a half a percent next year, and we know that the head one that's created is a negative 5% valuation as a result of that.

Josh: Well, if they go to a 40-year mortgage at the same time they raise the interest rates, then that may not have a 5% headwind impact, it might only be 1% at that point. So if they increase the availability of loan products as they're raising interest rates, we probably won't see a major disruption or major headwind created just from the rates alone... But man, I'll tell you right now, if they move to negative amortization or interest-only products with balloon payments, enjoy a 24-month run-up a value and then get ready for the crash, so I just hope they don't decide to get stupid like that.

Joey: Well, okay, that's a 24-month crash. I'm like, gonna set my watch.

Josh: Yeah, we already say it. 2004 and five was when they ran up the crazy loans available and people used them even though it didn't make sense. They still did it anyway. So hopefully, there are no products available in the market today, and for the most part, it's almost illegal because that DOD Frank bill that was passed after the mortgage crisis before for the most part, basically made it almost illegal to do something...

Joey: Well, the difference that I've noticed from then and now is back then you would hear people pulling out equity on the first home to buy the second home and equity is set on by a third, just... I don't hear that. I hear more cash buyers than I hear that, so...

Josh: Oh yeah. Absolutely. Well, and to your point, less than... It's roughly, maybe even at the most... And these are numbers that I'm coming from, but what we see in our office and when I talk to other brokerages, but it's 10% of the markets investors, so to your point, that's not happening, they're not pulling equity out and then going and buying another rental property with it, where before, that was very common.

Joey: If anything, it seems like the investors are coming from out of the area and they are cash buyers or they're very large down payment buyers, a lot of them, 10, 30 winning out of bigger properties and adding their portfolio by "Hey, I'll gobble up a single-family home in Redding with this $200,000, I need to recognize."

Josh: Well, people are chasing cap rates, and that's kind of a different conversation, but people are looking at the cities and trying to buy investment property down there and your cap rate might be 1% or up to 3% return on investment. Where in our area here it's... You're looking at 5%, even 8% cap rates on properties, and I think that people are much more attracted to those numbers.

Joey: I don't see a lot of inventory either, when you talk about the cap rate, you're not talking... Are you talking about the single-family home cap, reader you talking about more like multi-family?

Josh: Not... Well, just rental in general, so it could be a home or it could be a multi-family situation, but the investors for the most part, or shopping cap rates, and Shasta County has a better cap rate than a lot of other markets, at least currently, and so you do have investors that still wanna purchase, that's that 10% that are buying for investment, there's very little speculation going on right now, there are very few people flipping, there's not a lot of that, but there are people buying and holding, and that's that 10% that are looking at the cap rate and saying, "Hey, I'm gonna give X amount towards this property and I'm okay with the return I'm getting." It's not hard though, 'cause the banks are paying what, 1% right now at the most to save your money in the bank, and you're moving into an inflationary market where inflation 6%, if you don't put the money in a hard asset right now, your money, if I give $100,000, I'll put in the bank account today, based on the numbers, not my numbers, the federal government gave out where the inflation is over 6%, that same $100,000 is now worth $94,000, and that's just what inflict the cost of inflation is, but if I would have taken that $100,000, put it in real estate last year, right? Then let's say I bought a property with leverage, that $100,000 might be worth $150,000 today, so negative 6000 or up 50,000, which one sounds better?

Joey: Yeah, so if you really want to get the best of both worlds, you're gonna wanna buy a house and fill it full of crypto miners and then... And solar, don't forget solar.

Josh: Yeah. Crypto's a... You know... That's an interesting topic. 0

Joey: I was just kidding. I was just joking.

Josh: Yeah. Real estate is obviously the... It's a long game, but I haven't met too many people that bought real estate 20 years ago who lost money today.

Joey: No, no, exactly.

Josh: So if you can look at it from a long-view perspective, and as long as it's cash flowing, it just makes sense. I use this slide with the team and then I show on a slide of here since 1980s with rent increase. The most it might flatten out for six months, but that thing is at a 45-degree angle and it's been like that for 30 years. So the cost of living, cost of rent, cost of housing goes up.

Joey: Oh, absolutely.

Josh: And if you own a property and you secured a position in the market where your mortgage doesn't go up every month, it stays the same, but rents are going up every year in theory, or making more passive cash flow on that investment.

Joey: I guess one of the things that we've talked about, the big one for me would be... Because one of the things you talked about was access to materials to home builders, we don't have a lot of new construction, and it doesn't move fast here at all, so it doesn't take much for our inventory to drop quite a bit. The big factor is gonna be, I think, employment and locally it looks pretty good.

Josh: Yeah it's... Obviously, we have a pretty big disruption when it comes to raw materials. The good news is that in China right now, I was just reading this report, China right now is taking a pretty big hit on their new construction right now, and they compete against us for a lot of those raw materials and appliances and stuff like that. So if China is going through a correction right now where they're gonna have a reduction in demand that's gonna impact them, let's say 20-25%, then that means that we could begin to see our access to materials get better. Our biggest issue, I think, really is in the construction anyway is labor, do we have enough people to do what we need to do, 'cause I think that the material side of it is gonna fix itself over the next 6-12 months.

Joey: What... We're running out of time. I wanted to recap. So if anybody is part of that 2000, if you're behind on your mortgage payment, you have options, get ahead of it, don't get behind it, it's... It's putting your head in the sand. It's not gonna help you. No, but there are still programs right now, reach out to a broker, Josh, obviously reach out to Josh or your lender and find out, get ahead of this now, get ahead of the curve. And there are... You have options, you have solutions.

Josh: Yes.

Joey: This can end very, very well. It doesn't have to be a sad story, doesn't have to be a tragedy.

Josh: It can end the best it possibly can if you get ahead of it. Go with the crowd when it comes to these types of situations, go with the crowd because that's where the most protections are available at the government level.

Joey: Awesome. Well, thank you, Josh, I appreciate it. And until next time, look out for Josh Barker's market update, it comes out at the beginning of the month?

Josh: Yeah, we sent it out every month, it's more... This one's more free conversation, but the one we do each month is more confined to a couple of topics and put some time into that, so it's easy to read.

Joey: Awesome, thank you, Josh.

Josh: Yeah, thank you too.

*

Posted in Podcasts
Nov. 2, 2021

Shasta County Market Update - November 2021

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

From the Desk Of Josh Barker

The month of October proved to be a pivotal month for Shasta County Real Estate. It appears that the market has formally transitioned from a pandemic related market to a more traditional economic based market. The number of home sales decreased sharply in October while inventory continues to rise. The rental market continues to remain strong while builders struggle to get supplies to build new multi family units. This month we will discuss some of the hottest topics trending now in our local market. If you have any additional questions please feel free to contact us at any time at our office at 530-222-3800.

MARKET UPDATE FOR NOVEMBER 2021

Home Inventory Continues to Rise

Home Inventory Continues To Rise finishing October with 677 dwellings for sale, compared to 699 dwellings for sale at the end of October of last year. The growth in home inventory has largely been the result of fewer home sales over the past several months combined with a small increase in new listings coming to the market.

Home Sales Decrease Sharply

Home Sales Decreased Sharply in October finishing at 249 closed down 28% compared to October of last year. The sharp decrease in sales is largely a reflection of the market continuing to transform from a pandemic related market to a more balanced market. Sales peaked in June of this year with a whopping 367 closed which now appears to be the peak in the market for the year.

The Average Home Selling Price

The average home selling price finished at $389,272 down 8% compared to June of this year. The decrease in the average sales price was anticipated as fewer out of town buyers purchased in our local market recently. 

Interest Rates Continue to Remain Low 

Interest Rates Continue To Remain Low averaging 3.5% for a 30 year fixed mortgage. Mortgage rates are projected to inch higher as inflation begins to pay its toll on mortgage bonds. Interest rates are projected to increase to 3.75% by the 3rd quarter of 2022. For every 1% the mortgage rate increases, home buyer purchasing power decreases by 10%. 

The Rental Market 

The Rental Market continues to perform exceptionally well for investors. The vacancy rate has remained extremely low and rent rates have continued to climb. There have been several larger scale multi family developments under development in west Redding that are welcome additions to the much needed housing supply. Cost of rental housing is expected to climb as inflation pays its toll on operation costs combined with higher wages for tenants. Bad news for those on fixed incomes in rental situations. 

The California Foreclosure Moratorium

The California Foreclosure Moratorium expired July 31, 2021 providing a path for lenders to foreclose on delinquent mortgages in accordance with FHA guidelines. This policy change is beginning to work its way through the market as banks sort through forbearance policy and work with homeowners to restructure loans when possible. Unfortunately, many homeowners in forbearance are significantly delinquent and loan restructuring could prove to be challenging. It is estimated that over two thousand local Shasta County homeowners are behind on their mortgages and will be making some challenging decisions in the coming months. The options in these situations are slim: catch up the mortgage, sell, restructure the loan, or foreclose/short sale. Many of these types of properties are expected to reach the market for sale in the coming months.         

The Eviction Moratorium

The Eviction Moratorium ended September 30, 2021. This policy change has provided some additional options for landlords that either were struggling to collect rent or desired to sell but were not able to do so due to the moratorium. It is projected that there will be a noticeable increase in rental properties coming to the market for sale in the coming months. 

 

Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. Please feel free to contact our office with any additional questions you may have. 530-222-3800

 

 

 

 

 

Learn more about Josh Barkers 5 proven steps to selling your home by visiting 

reddinghomes.com/selling-your-home/ 

Learn more about Josh Barker's proven ideal investment formula by visiting

reddinghomes.com/buying-home/

 

Check the average value for your home instantly by visiting reddinghomes.com/home-value

 

Make it a great November! 

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
Oct. 5, 2021

Shasta County Market Update - October 2021

 

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

From the Desk Of Josh Barker

The local real estate market has experienced noticeable changes in supply and demand in the past 3 months.  In this month's market update, we will share some of the hottest topics trending now in our local real estate market. If you have any additional questions please feel free to contact us at any time at our office at 530-222-3800.

MARKET UPDATE FOR October 2021

Active Home Inventory Is Growing

Active home inventory has grown by nearly 30% over the past 6 months. Starting at a low of 463 total dwellings for sale in March, and finishing September with a standing inventory of 656. The increase in home inventory has been a welcomed change for many home buyers. Although, the recent increase in home inventory has contributed to a slightly higher average days on the market to get a home sold for sellers.

Home Sales Have Decreased

Home sales have decreased by over 25% over the past 3 months, with a peak of 367 closings in June and finishing at a low of 290 closings in September. The reduction in home sales was anticipated and largely due to the market's transition from a pandemic related market to a more balanced market. During the early stages of the pandemic many additional home buyers entered the local market due to migration pattern shifts, work from home options, and second home purchases. This large disruption has cooled recently and has resulted in lower overall buyer demand.

California Eviction Moratorium Is Ending...Here Is What To Know

As of September 30th 2021 the eviction moratorium in the state of California has expired. However, there are some remaining protections in place for those that qualify. to learn more click here. The end of the eviction moratorium will bring some relief to landlords that have desired to liquidate but weren't legally able to do so. In the coming months we could expect to see some of these rental properties reach the resale market and could provide additional options for home buyers.  

Rental Market Continues To Remain Tight 

The local rental market has continued to remain tight with limited options available for tenants. The trend does not appear to be slowing and has had an impact on housing affordability in recent years. Renting versus owning is a complicated decision and certainly is not a one case fits all scenario. However, thoughtful consideration to all the options available may be a good first step. Owning a home can limit options, but it can also provide some protection against housing inflation that is inherent to renting. To learn more about purchasing a home, please visit our site click here.

Home Affordability 

Over the past year we have heard a lot of discussion around housing affordability. Many experts have very good points on both sides of the discussion. One point that most of the experts agree on is that housing affordability today is still lower than historical norms. Historically the national percentage of income allocated towards housing was 21% compared to the current percentage of 17.1%. However, It is hard to ignore the fact that abnormally low interest rates have contributed to housing affordability in the recent year. 

New Construction

Residential Construction is on pace for one of its best years since 2006. The recent fall in lumber prices has been a welcomed change for home builders and are expected to fall even more in the coming months. However, skilled labor, home appliances and other building materials are in short supply creating challenges for home builders. 

Home Price Expectations

Home price expectations are extremely difficult to predict in the current environment. However, there are two sides of the equation to consider. First, there are the tailwinds that can cause the market to appreciate. For example...lowering interest rates, migration pattern shifts, family formation, population growth, inflation, wage growth, cost of construction, and limits on supply relative to demand. Next, are the headwinds that can put downward pressure on home prices. For example...Availability of financing, the type of loan products available and rising interest rates. It is how the tailwinds and headwinds reconcile that determines future home prices. If the tailwinds are stronger than the headwinds prices could rise. If the headwinds are stronger than the tailwinds prices can go down. Most experts agree that rising interest rates will be the largest headwind the housing market will face in the coming years.

 

Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. Please feel free to contact our office with any additional questions you may have. 530-222-3800

 

 

 

 

 

Learn more about Josh Barkers 5 proven steps to selling your home by visiting 

reddinghomes.com/selling-your-home/ 

Learn more about Josh Barker's proven ideal investment formula by visiting

reddinghomes.com/buying-home/

 

Check the average value for your home instantly by visiting reddinghomes.com/cma/property-valuation/

 

Make it a great October! 

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
Sept. 9, 2021

Shasta County Market Update - September 2021

 

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

From the Desk Of Josh Barker

As the market continues to transition from a pandemic related market to a more traditional market there will be noticeable changes to be on the watch out for. This month we will dive into some of the hottest topics trending now in the real estate market. As always, if you have any additional questions please feel free to contact me at the office at 530-222-3800.

MARKET UPDATE FOR September 2021

Home Inventory

The current growing home inventory relative to demand has been contributing to home price stabilization. Currently, there are approximately 641 homes active for sale on the market compared to 673 homes active for sale one year ago. 

Home Sales

Home sales reached 314 closed in the month of August, down from 366 closed in June of this year. Buyer demand appears to be transitioning from a pandemic related frenzy to a more traditional supply and demand representative market.

New Construction

New home and multi family constructions have continued to perform well in the Shasta County Market. The CARR Fire related rebuilds, existing home lot construction and other development are all contributing to the much needed housing supply. The future in the new housing sector is promising. Some very prominent national home builders are negotiating, and in some cases committing to developments in the area.  The pressures of higher lumber costs are beginning to abate slightly and are expected to trend down further by the end of the year.

Interest Rates

Mortgage interest rates have been the silver lining that has served the housing market extremely well over the past 18 months with rates as low as the mid 2% range for a 30 year mortgage. Although experts predict rates to remain fairly low in the near future, they expect to see rates inch into the mid 3% range by the end of the year. Keep in mind that for every 1% the rate increases, purchasing power is affected by as much as 10%.

Eviction Moratorium

Due to the pandemic related eviction moratorium and tighter eviction restrictions, imposed by the state of California prior to the pandemic, landlords have found it difficult to evict tenants. These restrictions have contributed to the overall lower home inventory and continue to serve as a challenge for investors that desire to liquidate. Recently the Supreme Court ruled to ban the eviction moratorium. However, the State of California's eviction moratorium remains in place until 9/30/2021 if not extended. 

Price Reductions

Over the past year home price appreciation greatly outpaced many overpriced listings. Homes could be listed for sale above recent comparable sales and, within several months, sell anyway. The market was HOT and most homes sold quickly.  As the rate of appreciation has recently begun to decline, many overpriced listings have continued to remain on the market for longer periods of time. In an increasing number of cases many home sellers that recognize the market shift, and are motivated, are electing to reduce prices and get moved.  

 

Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. Please feel free to contact our office with any additional questions you may have. 530-222-3800

 

 

 

 

 

Learn more about Josh Barkers 5 proven steps to selling your home by visiting 

reddinghomes.com/selling-your-home/ 

Learn more about Josh Barker's proven ideal investment formula by visiting

reddinghomes.com/buying-home/

 

Check the average value for your home instantly by visiting reddinghomes.com/cma/property-valuation/

 

Make it a great September! 

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
Aug. 3, 2021

Shasta County Market Update - August 2021

 

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

From the Desk Of Josh Barker

As the market begins to transition from a pandemic related market to a more traditional market there will be noticeable changes to be on the watch out for. This month we will dive into some of the hottest topics trending now in the real estate market. As always, if you have any additional questions please feel free to contact me at the office at 530-222-3800.

MARKET UPDATE FOR AUGUST 2021

Homes Sales Report For July

Homes sales in the month of July fished at 300 closings, down from 363 in the month of June and down 25% from the month of July of last year. Higher home prices combined with lower inventory has contributed to the impact on the overall sales volume. In addition, the major migration pattern shifts from larger cities is showing signs of stabilizing and could reduce overall buyer demand in the local market. 

Homes Listing For Sale Report For July

The number of home listings available for purchase is increasing. Currently there are approximately 600 dwellings available for sale up from 462 dwellings for sale in March of this year. The absorption rate (the number of months of supply) has also jumped from 1.65 months supply in March to 1.85 month supply in July, a 16% increase. These numbers may not appear all that impressive on the surface, but it does illustrate the point that home inventory relative to demand is no longer decreasing. 

Interest Rates

Interest rates continue to remain historically low, although, in recent weeks have nudged a bit higher. Most experts predict rates to level off in the mid 3% range by the 4th quarter. As interest rates increase, the purchasing power of  the average buyer diminishes slightly. For every 1% in rate increase, a borrower's purchasing power is reduced approximately 10%. Provided interest rates do not increase quickly, it is likely that overall effect of rates on home prices will remain marginal. However, if interest rates increase abruptly, there could be a corresponding effect on home prices.

Opportunity For Transitioning Home Sellers

The recent changes in home inventory may serve as an excellent opportunity for transitioning home sellers. As the inventory increases, existing homeowners will have more options of homes to choose from for purchase. At the same time, homes are still selling quickly- which means the process can be completed with less stress and concern. 

The Media Impact

The future of the real estate market has been a popular discussion for many. Smart people on both sides of the issue have excellent points. One topic most experts agree on in the current state of the market is due to extremely low inventory relative to the demand, combined with historically low interest rates. As these major factors begin to shift we can all expect news organizations to pick and choose eye catching headlines that grab attention. If the factors of supply relative to demand and interest rates adjust slowly, the market will likely transition to a more balanced market. 

The Future For Real Estate

The long term prospects of the real estate market are positive. The country simply does not have enough existing housing units to need the demands of the future. However, we currently have a housing market the at is  largely a reflection of a pandemic. How these two issues reconcile is what makes this market very interesting. In the short term, the overall housing market and economy has to rebalance. In the longer term, the market will have to grow to meet the growing needs. 

 

Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. Please feel free to contact our office with any additional questions you may have. 530-222-3800

 

 

 

 

 

 

Learn more about Josh Barkers 5 proven steps to selling your home by visiting 

reddinghomes.com/selling-your-home/ 

Learn more about Josh Barker's proven ideal investment formula by visiting

reddinghomes.com/buying-home/

 

Check the average value for your home instantly by visiting reddinghomes.com/cma/property-valuation/

 

Make it a great August! 

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