Shasta County Market Update - December 2023
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MARKET UPDATE FOR DECEMBER 2023
First and foremost, I hope that all of you are enjoying this Holiday season. The North State continues to be a beautiful place to enjoy at this time of year. If you can get out, take a moment and check out downtown. It is fantastic to see so many eye-catching projects come together. If you want a great evening out, check out the Garden of Lights at the Sundial Bridge if you want a treat. Wow! It is nothing less than spectacular! This month, we will dive into some of the hottest current topics in the local Real Estate market. As always, f you have any questions please feel free to contact us at 530-222-3800. Have a great Holiday month!
Homes sold in November finished at 176 up 7.3% compared to last year when home sales ended at 164. As we stated in the last several market updates, sales volumes are beginning to mirror last year's, making the overall real estate market a bit more predictable.
Homes pended in November finished at 187, up 5.1% compared to last year when homes pended finished at 178. Again, the numbers continue to mirror last year's numbers despite the higher interest rate environment.
Homes Listed for Sale
The total homes active for sale in November finished at 689 down 14.1% compared to last year when home inventory finished the month at 802. Many sellers have been reluctant to relinquish their all-time low interest rate on their existing mortgage for today's higher mortgage rates. However, new listings coming to market finished at 193 in November, down only 10.6% compared to last year when 216 new listings came to market in the same month.
Average Sales Prices
The average sales price for a home in November finished at $408,793, up 10.33% compared to last year when the average sales price in November ended at $370,531. Overall, low home inventory has contributed to holding home prices up despite interest rate challenges.
After peaking at 8% for a 30-year mortgage, mortgage interest rates have slightly eased, currently hovering around an average of 7.5%. Many experts expect rates to remain higher in the short term, with long-term projections suggesting rates in the mid-6 % range at some point next year.
A recent search on the MLS revealed that approximately 25 new homes are listed for sale locally. In years past, it was not uncommon to have more than 50 new homes for sale at any time. Among the many challenges home builders face, one of the most significant challenges is building a home for a price that a buyer can afford to purchase at today's interest rates. Many builders have tapped the breaks and taken a much more conservative approach, at least until building conditions improve.
The rental market has remained resilient with vacancy rates estimated in the 6% range. Only about 6% of the total rental market is vacant, awaiting tenants. With higher mortgage rates, many would-be buyers have elected to rent, which has kept rents strong. One exception is the short-term rental market (VRBO), where many owners report higher vacancy rates and softening prices.
The local foreclosure market has grown slightly in recent months, with approximately 176 single-family properties in some stage of foreclosure in Shasta County. The recent uptick in foreclosure activity combines several factors, one being the reduction in loan modifications offered during the pandemic.
Obtaining reasonably priced insurance continues to be a challenge for many in the local Shasta County market and the State of California. Many purchasers have experienced sticker shock after discovering that policies have doubled or tripled over the past year. In addition, some companies have refused to write home insurance policies, making the time and ability to locate insurance even more challenging. Homes located in rural areas are the most prone to challenges and require careful attention and research to locate the best options. The challenges of higher construction costs and wildfire losses have contributed to the overall policy rate increases.
In this market update, we've compiled informative slides that echo the themes discussed, providing a visual representation of the evolving market. Should you have any queries or seek further insights, we're here to assist. Below is a collection of slides that correlate with many of the topics discussed in this mid-year review. As always, if you have any additional questions please feel free to contact us at 530-222-3800 or simply respond to this email. Here's to a future brimming with promise and possibility in the Shasta County real estate landscape!