First and foremost I hope that this email finds you and your family healthy and safe. To say that all of us, all over the world, are shaken by the latest events is an understatement. I want to take a moment and say thank you to all of those that are continuing to serve the public in this trying time. From our grocery store clerks, to the police officers, to the health care providers, and many, many more, Thank you! This month I will do my best to lay out the state of the real estate market in Shasta County. I apologize in advance as this update will cover a range of topics regarding real estate. For that reason, it may be best to just browse the topics that interest you most.
As always, if you have any additional questions please feel free to contact me at 530-222-3800 or feel free to respond to this email.
Homes sold Report for March
Homes sold in the month of March finished at 237. This is down from 292 in the same month, 1 year ago. It is important to note that there were some additional cancelled escrows in the month of March due to the disruption in the economy. The cancellations were predictable and largely due to employment changes and financing guidelines.
Pending Sales Report for March
The first 2 weeks of March started out extremely strong for home sales and all indicators pointed to a very busy spring. Of course, that all changed in the second half of the month as the Pandemic began to take hold in our state. In spite of the pandemic news, we continued to see home sales take place as buyers and sellers found new ways to transact. New pending home sales finished at 290. This is down from 306, 1 year ago.
The rental market has experienced the largest changes over the past month. The State of California passed a law preventing the enforcement of evictions until the end of May. For landlords, this means that in the event that a tenant fails to pay, the landlord cannot take action until the end of May. This policy will likely transfer the hardship away from tenants and place it onto the landlords. Many of these landlords still have a mortgage on the property to cover. No easy answers...
The mortgage market has experienced a disruption over the past 30 days. The state of California, as well as the Federal government, has issued forbearance regulations for many of the Nation's banks. This means that in many cases homeowners who cannot afford to make their mortgage due to the current crises may qualify to temporarily suspend some or all their mortgage payment for approximately 90 days. As a result of this program, as well as the major impacts on the economy, many investors related to mortgages are becoming reluctant. Interest rates are unpredictable, and many loan programs are being eliminated altogether. Although these challenges are likely temporary, those challenges are affecting those that are currently transacting.
New construction has continued to take place in our local market in spite of current events. Builders are considered to be a vital part of the state economy and with the State's housing shortage we can understand why. The challenge ahead for local home builders will be determining buyer demand. With already razor thin margins, any major shift in demand could leave many builders holding inventory. Again, no easy answers...
Home Price Expectations
Home prices have a lot more to do with supply and demand than volume. We can assume that home sales volume will decline. However, whether home prices decline has a lot to do with how many homes become available for sale. If inventory remains stable and does not climb rapidly, prices will likely remain stable. Too early to call this, but we know what to look for.
I have been asked by many homeowners if now is a good time to sell. I can say that I do not see an advantage to selling now. If a person "needs to sell" there continues to be a market to accomplish your goals. If you "want to sell but do not need to sell" it may be a good idea to wait. The health risks involved, as well as the anticipated unpredictability of the market over the next 2 months, may cause many to think twice...
The number of buyers continuing to shop in spite of current events is impressive. I can understand the opportunity. Low interest rates, little competition for the best homes on the market, the optimism and reality that these challenging times will come to pass are attractive to those who are currently looking for homes. The key to shopping for homes at this time is to conduct as much VIRTUAL research as possible. Minimize your exposure to others and become very selective as to what you are willing to look at physically.
The real estate market continues to transact. Home mortgages will be a challenge over the next several months and payments for both rentals and mortgages may be disrupted. The key is not to panic, like all things, this too will come to pass and when it does, we will all climb out of it together one day at a time.