Shasta County Market Update - January 2024

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From the Desk Of Josh Barker

MARKET UPDATE FOR JANUARY 2024

Happy New Year! As we welcome the new year, we're filled with gratitude! A heartfelt thank you resonates with all of us at Josh Barker Real Estate. It's an honor to share that your unwavering support has recognized us as the "Best of The North State" for the second consecutive year.' This recognition is a testament to our hardworking team's relentless dedication and passion to serving our community. We look forward to creating even more exceptional client experiences together with all of you in 2024! Reflecting on the dynamic shifts in the real estate market this past year, we're excited to pause and share an insightful overview of the past year with you and share a few thoughts on what to expect in 2024. As always, if you have any questions please feel free to contact us at 530-222-3800. Have a great January!

Homes Sold For The Year

The total homes sold in 2023 finished at 2,316, down 23% compared to last year when home sales for the year finished at 3,034. The anticipated slowdown in the housing market was largely attributed to higher interest rates and low home inventory.

Homes Sold For December

The total number of homes sold in the month of December finished at 139, down 23% compared to last year when home sales in December finished at 180. The slowdown is largely attributed to the reasons already stated previously and is very consistent with how the majority of the past year has performed.

Homes Listed For Sale For The Year

The total of homes listed for sale for the year finished at 3,193, down 20% compared to last year when a total of 3,979 homes were listed for sale. Many homeowners have interest rates in the 3-4% range, making it more challenging to relinquish lower rates for the rates of today's market.

Homes Listed For Sale For December

The total number of homes listed for sale in December finished at 138 down 13% compared to last year when 159 homes were listed for sale. The reduction in home inventory has contributed to overall price stability in the local market in the face of a higher interest rate environment.

The Average Sales Price In December

The average sales price (Total value of all home sales divided by the total number) finished at $361k, down 6% compared to last year when the average sales price finished at $385k.

The Median Sales Price For December

The median sales price (the middle price of all homes sold) finished at $350k, up 3% compared to last year when the median sales price finished at $340k.

Current Mortgage Interest Rates

Mortgage interest rates are currently averaging 7.125%, up from the rates of December last year when the mortgage rates averaged 6.5%. The Federal Reserve recently stated that it anticipates lowering rates in 2024. This statement was exciting news for the housing market as lower rates allow for more buyers to participate in homeownership and can provide some relief to homebuilders trying to build homes that the market can afford to purchase.

New Construction

The total number of new construction building permits issued in the City of Redding from January through November 2023 finished at 73, down 63% compared to last year when 223 new construction building permits were issued in the same period. This eye-catching reduction was largely attributed to the higher interest rate environment which makes it very difficult for home buyers and home builders to make a deal happen.

The Rental Market

The long-term rental market in the Northstate continues to perform exceptionally well. Many property managers report vacancy rates (total percentage of vacant rental properties under management) between 5-8% overall. This low vacancy rate has contributed to higher rents and shorter vacancy periods overall. The short-term vacation rental market has been a bit softer in comparison as vacancy rates have climbed and price reductions have been more common.

Housing Expectations For 2024 In The NorthState

Plenty of opinions are floating around regarding what to expect in the housing market this year. Instead of adding to the already crowded opinion space, let's review several topics that affect housing. First, according to the Federal Reserve (which controls rates), they will likely lower rates in 2024. For every 1% that the mortgage rate goes down., a buyer's purchasing power increases by up to 10%. Second, with many homeowners sitting in homes with all-time low interest rates, having a low home inventory will be challenging, which means more competition. Finally, as rates come down, more buyers will be able to enter the housing market, and builders will have a bit more room to build for a modest profit. Clearly, this process will take time, and it is likely that the housing market will not experience increased housing supply at more affordable payments until later in the year.

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!

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Make it a great January,
Josh Barker

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P.S. You can view all of our past real estate market updates by visiting www.reddinghomes.com/blog

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