March 19, 2019

What Credit Score Do You Need To Buy A House?

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

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

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

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

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

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

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

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

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

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

FICO® reported,

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

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

Bottom Line

At least 84% of Americans have a score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream! As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
March 14, 2019

4 Reasons to Buy a Home in the Spring

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

1. Prices Will Continue to Rise

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

Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Projected to Increase

Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year fixed rate mortgage came in at 4.41% last week. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting rates will increase by this time next year.

An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.

3. Either Way, You Are Paying a Mortgage

Some renters have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.

Are you ready to put your housing cost to work for you?

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But what if they weren’t? Would you wait?

Examine the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, greater safety for your family, or you just want to have control over renovations, now could be the time to buy.

Bottom Line

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
March 5, 2019

Shasta County Market Update - March 2019

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


From The Desk Of Josh Barker @ RE/MAX

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

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

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

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

Bottom Line

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

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

 

Your Realtor,

Josh Barker

Posted in Newsletters
Feb. 27, 2019

What to Know About Zillow and Trulia

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

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

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

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

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

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

As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Make it a great day!

Posted in Josh's Blog
Feb. 26, 2019

Why A Normal Market is Just What We Need

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

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

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

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

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

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

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

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

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

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

Bottom Line

Home prices will start to appreciate by historical norms as we continue to head towards a more ‘normal’ market, rather than the over 6% seen over the course of the last couple of years. This is great news! Homeowners looking to sell their home will have buyers, as more buyers will be able to afford them! As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

 

Posted in Josh's Blog
Feb. 19, 2019

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

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

Bach went on to explain:

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

Then he explains the secret to buying that home!

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

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

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

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Who is David Bach?

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

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

Posted in Josh's Blog
Feb. 15, 2019

Why Homeownership Matters Now More Than Ever

Study after study shows that no matter what generation Americans belong to, the vast majority believe that homeownership is an important part of their American Dream. The benefits of homeownership can be broken into two main categories: financial and non-financial (often referred to as emotional or social reasons.)

For Americans approaching retirement age, one of the greatest benefits to homeownership is the added net worth they have been able to achieve simply by paying their mortgage!

The Joint Center for Housing Studies at Harvard University focused on homeowners and renters over the age of 65. Their study revealed that the difference in net worth between homeowners and renters at this age group was actually 47.5 times greater, with nearly half their net worth coming from home equity!

Homeowners over the age of 65 are much more financially prepared for retirement and often own their homes outright if they were fortunate enough to purchase their homes before the age of 36.

Their 30 years of mortgage payments have paid off as they gained equity through their monthly payments and as home values appreciated.

It is no surprise that lifelong renters have had a hard time accruing net worth as the latest Census report shows that the Median Asking Rent has been climbing consistently over the last 30 years.

Your monthly mortgage payment is a form of ‘forced savings’ building your net worth with every payment!

Bottom Line

As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
Feb. 4, 2019

Whose Mortgage Do You Want to Pay? Yours or Your Landlord’s?

There are some people who haven’t purchased homes because they are uncomfortable taking on the obligation of a mortgage. However, everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As Entrepreneur Magazine, a premier source for small business, explained in their article, “12 Practical Steps to Getting Rich”:

“While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

With home prices rising, many renters are concerned about their house-buying power. Mike Fratantoni, Chief Economist at MBA, explained:

“The spring homebuying season is almost upon us, and if rates stay lower, inventory continues to grow, and the job market maintains its strength, we do expect to see a solid spring market.”

As an owner, your mortgage payment is a form of ‘forced savings,’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person building that equity.

As mentioned before, interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 4.46% last week.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

Posted in Josh's Blog
Feb. 1, 2019

Shasta County Market Update - February 2019

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


From The Desk Of Josh Barker @ RE/MAX

The month of February is off to a great start due to a strong January. The middle and lower price ranges have performed very well when compared to homes that are priced over $650,000. This month we will discuss some of the hottest topics trending now in our local market. If you have any questions please feel free to respond to this email or contact me at the office at 530-222-3800.

Home prices

Home price trends in our local market are fairly predictable. Each year in the 4th quarter, home prices begin to level off due to a slow down in buyer demand and overall home inventory available for sale due to the holidays. In the 1st quarter of each year we begin to see the number of homes sales increase. This means that home prices in the month of January and February tend to mirror the home prices of the 4th quarter of the previous year. Once the market transitions into the second quarter, depending on the size of the overall home inventory for sale, the number of home buyers shopping in the local market and interest rates, the housing market could experience an increase in appreciation. When it comes to home price expectations, the months of January and February tend to be months of "wait and see". Since most of my readers are looking for more than "wait and see" I will say this...I am expecting home prices to push up by approximately 3% this year provided interest rates remain the same. Check the Value of Your Home Instantly www.shastahomevalue.com.

Shasta Home Value Checker

Home Inventory

The total number of homes available for purchase in Shasta County is currently 919. Up from 865 in the same period last year. This is a good sign for would be home buyers because there are more homes to choose from. These numbers could be mean slightly longer market times for home sellers. Keep in mind, homes that are priced well, show well, and marketed properly can still enjoy shorter than average market times. Search all home for sale by visiting www.Joshbarker.com

     

New Construction

New construction is by far my largest concern for the local housing market. With the fires that have plagued the state and had a direct hit on our community, the demand for labor has been tapped out. The cost of new construction has increased and will likely become a major barrier to meeting the overall housing needs of our community. Although new construction in Shasta County will be up in 2019, the vast majority of the increase in new builds will be for the homeowners affected by the local CARR fire. This means that very little new home inventory will be allocated to buyers just looking to move up to a new home. With construction costs increasing, it will be a balancing act for home builders to produce product at a cost that makes sense for all parties involved.

Click here to search all homes for sale in Shasta County.

Interest Rates

Mortgage interest rates are currently averaging between 4.75% and 5% depending on the type of financing a borrower obtains. For those of us that have participated in home ownership for a few decades or more, we recognize how low these rates are historically. However, many of today's new home buyers have been exposed to historically low interest rates for an extended period of time. For this reason, we can expect there to be a psychological impact as mortgage rates increase. In addition, home prices in our local market are equally impacted by mortgage rates due to the fact so many of our local buyers obtain financing in order to purchase a home. For every 1% that the mortgage rate increases, the buyers purchasing power decreases by 10%. The Federal Reserve, the entity that is responsible for setting rates, has stated their desire to raise rates a full 1/2% in 2019. It is a likely scenario if the overall US economy continues to grow at a brisk pace.

Bottom Line

The local real estate market is off to a great start in 2019. Interest rates are averaging below 5% and buyer optimism is high. New construction will be a hot topic throughout this year.

As always, if you have any additional questions, please feel free to respond to this email or contact me directly at the office at 530-222-3800. I hope that all of you have a great start to 2019!

 

Your Realtor,

Josh Barker

Posted in Newsletters
Jan. 28, 2019

Why It Makes No Sense to Wait for Spring to Sell

The price of any item (including residential real estate) is determined by the theory of ‘supply and demand.’ If many people are looking to buy an item and the supply of that item is limited, the price of that item increases.

The supply of homes for sale dramatically increases every spring, according to the National Association of Realtors (NAR). As an example, here is what happened to housing inventory at the beginning of 2018:

Putting your home on the market now, rather than waiting for increased competition in the spring, might make a lot of sense.

Bottom Line

Buyers in the market during the winter are truly motivated purchasers and they want to buy now. With limited inventory currently available in most markets, sellers are in a great position to negotiate. As always, we here at Josh Barker Real Estate Advisors are here to help answer any questions you may have about buying or selling homes here in Redding and Shasta County. Feel free to give us a call at 530-222-3800 or email me at josh@reddinghomes.com.

 

Posted in Josh's Blog