Shasta County Market Update - June 2023
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MARKET UPDATE FOR JUNE 2023
The real estate market in Shasta County is currently facing challenges due to higher mortgage interest rates, resulting in decreased buyer demand and fewer new listings. However, the limited availability of homes has helped maintain home values, particularly for properties valued below $450,000. The new construction industry has been significantly affected, with home builders focusing on completing ongoing projects while monitoring the market for signs of price stability. On the other hand, the rental market has shown some signs of strength, possibly due to the higher cost of mortgages, which has led some potential homebuyers to turn to renting. Overall, despite the existing market challenges, there is positive news for homeowners, especially those with homes valued below $450,000. This month we will dive into some of the hottest topics in the local market trending now... If you have any questions please feel free to respond to this email or contact us at 530-222-3800.
In May, the number of homes sold reached 243, representing a decrease of 20.8% compared to the same period last year when 307 homes were sold. The rise in mortgage interest rates has played a significant role in reducing buyer demand.
Homes For Sale
The average number of homes available for sale in May was 610, lower compared to the figure in May of the previous year when the average was 656. The limited inventory has contributed to supporting home values over the past year, as a surge in inventory could have caused a more rapid and substantial decline in prices.
New Listings In May
In May, the total number of new listings entering the market averaged 350, showing a 15% decrease compared to May of the previous year when the average was 412. Homeowners are hesitant to give up lower mortgage rates from the past, as the majority of existing mortgages (around 99%) are priced below 6%.
Currently, 30-year fixed mortgage interest rates are averaging 6.75%, reflecting a 1% increase compared to May of the previous year when the average rate was 5.23% for a 30-year mortgage. Leading experts in the banking industry predict that mortgage rates may remain in the 6% range for the rest of the year.
The number of new construction permits issued in the City of Redding through May 2023 has decreased by approximately 90% compared to the same period in 2022. Homebuilders are currently focused on completing ongoing projects and closely monitoring the real estate market for signs of price stability.
Over the past month, the residential rental market has shown signs of strength, with an increase in rental applications. While some of this demand may be seasonal, the higher cost of mortgages has driven many potential homebuyers into the rental market. The current vacancy rate in California is averaging 3.9%, which is nearly the lowest on record since 2016 when it reached 3.6%.
After a year of gradual price declines in Shasta County due to high mortgage interest rates, there is finally some positive news for homeowners. Homes valued below $450,000 have experienced more price stability, as buyer demand has remained strong relative to supply, resulting in more competitive offers.
Below are 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.