Shasta County Market Update - December 2019
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From the Desk Of Josh Barker @ RE/MAX
Redding has been ranked #3 among the top 25 coolest towns in America!
Check out the full article here: https://matadornetwork.com/read/redding-california-outdoors-destination
Every time I make the trip north, after visiting other parts of California and as I drop down the hill between Cottonwood and Anderson, I am always struck by the beauty of our area. I am also quickly reminded of how little traffic we actually experience, except between the times of 5 pm and 5:15 pm - Ha Ha! I can not help but smile at the snow-covered mountains that sit as the picturesque backdrop to our rolling hills and the eye-catching river that meanders through our community. Shasta County is a special place, and I suspect that many of you find it as beautiful as I do.
Home sales in Shasta County finished at 233 in the month of November down from 263 in the same month one year ago. The largest contributing factor to the decreased number of home sales year over year is the absence of fire-related buyers that were in the market last year at this time. The slow down was expected and is expected to level out by the end of January.
New listings coming to the market in the month of November finished at 234. This is down from 249 in the same month 1 year ago. The slight reduction of new listings coming to the market will be short-lived as many new homes are expected to reach the market in early spring.
The current inventory of homes available for purchase is averaging 1,039. This is down from 1,083 at the same time last year. The slight -4% decrease in home inventory is contributing to the overall price stability in our local market. Our company expects the inventory of homes available for purchase to decline between now and the end of January. In the early spring, we expect to see a noticeable increase in new construction which will provide much-needed inventory to our local market.
Interest rates have continued to remain historically low with the average 30-year fixed mortgage interest rate of 4%. There has been a noticeable increase in the number of low money or no money down purchases taking place in the local market. The more flexible lenders become, the higher the demand will be for homes. The ability for homebuyers to purchase with low down payments looks good on the surface but also comes with an increased risk of defaults and overall housing stability. Until now, our company has been optimistic about the strong fundamentals in the housing market. Although increased buyer demand is a good thing, if it is largely created by overly flexible financing options it could turn into a bad thing.
New construction in Shasta County has been very slow to get moving compared to other regions in the state and country. Over the past 10 years, there have only been a handful of new subdivisions taking shape. The fires last year brought a noticeable increase to the number of permits pulled for new construction. Although these permits were pulled to replace previous existing home inventory, the increase in jobs and revenue being pumped back into our community has been positive.
The second wave of new construction taking shape will be much more noticeable in 2020. There are multiple, new subdivisions currently under development that will be offering new homes for purchase throughout the county in early spring. This spring will be the first time in 10+ years that we will have such a high number of new homes offered for purchase. The largest factor in the success of these new subdivisions will be overall buyer demand and the volume in which these new homes come available. Having multiple builders bringing similar products to the market at the same time will be challenging to say the least.
California Housing Market
The California housing market has had its challenges over the past 12 months. Large Metro markets like the Bay Area and Southern California experienced softening home prices in the first part of 2019. It appears that home prices in these markets have reached a point that has squeezed affordability and will likely remain an issue heading into 2020. The challenges in other parts of the state could translate into a positive for our local market as some may choose to move to our community.
Shasta County has remained affordable in comparison to many other markets throughout the state. The median price for a home in California according to Zillow is $552,000 while the average price for a home in Shasta County is $275,000. With housing prices that are half of the cost of the rest of the state, Shasta County remains a great option for many.
You can view the average value of your home instantly by visiting www.shastahomevalue.com
As always, if you have any additional questions regarding real estate, we are always here to help. Please feel free to email me directly [email protected] or contact me by telephone at 530-222-3800. On behalf of all of us here at the office, we wish all of you a Merry Christmas and a Happy New Year!
P.S. You can view all of our past real estate market updates by visiting www.reddinghomes.com/blog