Shasta County Market Update - November 2021
> Click Here to watch Josh's video blog for the month of November. From the Desk Of Josh Barker The month of October proved to be a pivotal month for Shasta County Real Estate. It appears that the market has formally transitioned from a pandemic related market to a more traditional economic based market. The number of home sales decreased sharply in October while inventory continues to rise. The rental market continues to remain strong while builders struggle to get supplies to build new multi family units. This month we will discuss some of the hottest topics trending now in our local market. If you have any additional questions please feel free to contact us at any time at our office at 530-222-3800. MARKET UPDATE FOR NOVEMBER 2021 Home Inventory Continues to Rise Home Inventory Continues To Rise finishing October with 677 dwellings for sale, compared to 699 dwellings for sale at the end of October of last year. The growth in home inventory has largely been the result of fewer home sales over the past several months combined with a small increase in new listings coming to the market. Home Sales Decrease Sharply Home Sales Decreased Sharply in October finishing at 249 closed down 28% compared to October of last year. The sharp decrease in sales is largely a reflection of the market continuing to transform from a pandemic related market to a more balanced market. Sales peaked in June of this year with a whopping 367 closed which now appears to be the peak in the market for the year. The Average Home Selling Price The average home selling price finished at $389,272 down 8% compared to June of this year. The decrease in the average sales price was anticipated as fewer out of town buyers purchased in our local market recently. Interest Rates Continue to Remain Low Interest Rates Continue To Remain Low averaging 3.5% for a 30 year fixed mortgage. Mortgage rates are projected to inch higher as inflation begins to pay its toll on mortgage bonds. Interest rates are projected to increase to 3.75% by the 3rd quarter of 2022. For every 1% the mortgage rate increases, home buyer purchasing power decreases by 10%. The Rental Market The Rental Market continues to perform exceptionally well for investors. The vacancy rate has remained extremely low and rent rates have continued to climb. There have been several larger scale multi family developments under development in west Redding that are welcome additions to the much needed housing supply. Cost of rental housing is expected to climb as inflation pays its toll on operation costs combined with higher wages for tenants. Bad news for those on fixed incomes in rental situations. The California Foreclosure Moratorium The California Foreclosure Moratorium expired July 31, 2021 providing a path for lenders to foreclose on delinquent mortgages in accordance with FHA guidelines. This policy change is beginning to work its way through the market as banks sort through forbearance policy and work with homeowners to restructure loans when possible. Unfortunately, many homeowners in forbearance are significantly delinquent and loan restructuring could prove to be challenging. It is estimated that over two thousand local Shasta County homeowners are behind on their mortgages and will be making some challenging decisions in the coming months. The options in these situations are slim: catch up the mortgage, sell, restructure the loan, or foreclose/short sale. Many of these types of properties are expected to reach the market for sale in the coming months. The Eviction Moratorium The Eviction Moratorium ended September 30, 2021. This policy change has provided some additional options for landlords that either were struggling to collect rent or desired to sell but were not able to do so due to the moratorium. It is projected that there will be a noticeable increase in rental properties coming to the market for sale in the coming months. Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. Please feel free to contact our office with any additional questions you may have. 530-222-3800 Learn more about Josh Barkers 5 proven steps to selling your home by visiting joshbarker.chime.me/your-home-sold Learn more about Josh Barker's proven ideal investment formula by visiting joshbarker.chime.me/buying-a-home Check the average value for your home instantly by visiting joshbarker.chime.me/home-value Make it a great November! Josh Barker P.S. You can view all of our past real estate market updates by visitingjoshbarker.chime.me/blog
Shasta County Market Update - October 2021
Click Here to watch Josh's video blog for the month of October. From the Desk Of Josh Barker The local real estate market has experienced noticeable changes in supply and demand in the past 3 months. In this month's market update, we will share some of the hottest topics trending now in our local real estate market. If you have any additional questions please feel free to contact us at any time at our office at 530-222-3800. MARKET UPDATE FOR October 2021 Active Home Inventory Is Growing Active home inventory has grown by nearly 30% over the past 6 months. Starting at a low of 463 total dwellings for sale in March, and finishing September with a standing inventory of 656. The increase in home inventory has been a welcomed change for many home buyers. Although, the recent increase in home inventory has contributed to a slightly higher average days on the market to get a home sold for sellers. Home Sales Have Decreased Home sales have decreased by over 25% over the past 3 months, with a peak of 367 closings in June and finishing at a low of 290 closings in September. The reduction in home sales was anticipated and largely due to the market's transition from a pandemic related market to a more balanced market. During the early stages of the pandemic many additional home buyers entered the local market due to migration pattern shifts, work from home options, and second home purchases. This large disruption has cooled recently and has resulted in lower overall buyer demand. California Eviction Moratorium Is Ending...Here Is What To Know As of September 30th 2021 the eviction moratorium in the state of California has expired. However, there are some remaining protections in place for those that qualify. to learn more click here. The end of the eviction moratorium will bring some relief to landlords that have desired to liquidate but weren't legally able to do so. In the coming months we could expect to see some of these rental properties reach the resale market and could provide additional options for home buyers. Rental Market Continues To Remain Tight The local rental market has continued to remain tight with limited options available for tenants. The trend does not appear to be slowing and has had an impact on housing affordability in recent years. Renting versus owning is a complicated decision and certainly is not a one case fits all scenario. However, thoughtful consideration to all the options available may be a good first step. Owning a home can limit options, but it can also provide some protection against housing inflation that is inherent to renting. To learn more about purchasing a home, please visit our site click here. Home Affordability Over the past year we have heard a lot of discussion around housing affordability. Many experts have very good points on both sides of the discussion. One point that most of the experts agree on is that housing affordability today is still lower than historical norms. Historically the national percentage of income allocated towards housing was 21% compared to the current percentage of 17.1%. However, It is hard to ignore the fact that abnormally low interest rates have contributed to housing affordability in the recent year. New Construction Residential Construction is on pace for one of its best years since 2006. The recent fall in lumber prices has been a welcomed change for home builders and are expected to fall even more in the coming months. However, skilled labor, home appliances and other building materials are in short supply creating challenges for home builders. Home Price Expectations Home price expectations are extremely difficult to predict in the current environment. However, there are two sides of the equation to consider. First, there are the tailwinds that can cause the market to appreciate. For example...lowering interest rates, migration pattern shifts, family formation, population growth, inflation, wage growth, cost of construction, and limits on supply relative to demand. Next, are the headwinds that can put downward pressure on home prices. For example...Availability of financing, the type of loan products available and rising interest rates. It is how the tailwinds and headwinds reconcile that determines future home prices. If the tailwinds are stronger than the headwinds prices could rise. If the headwinds are stronger than the tailwinds prices can go down. Most experts agree that rising interest rates will be the largest headwind the housing market will face in the coming years. Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. Please feel free to contact our office with any additional questions you may have. 530-222-3800 Learn more about Josh Barkers 5 proven steps to selling your home by visiting joshbarker.chime.me/your-home-sold Learn more about Josh Barker's proven ideal investment formula by visiting joshbarker.chime.me/buying-a-home Check the average value for your home instantly by visiting joshbarker.chime.me/home-value Make it a great October! Josh Barker P.S. You can view all of our past real estate market updates by visitingjoshbarker.chime.me/blog
Shasta County Market Update - August 2021
Click Here to watch Josh's video blog for the month of August. From the Desk Of Josh Barker As the market begins to transition from a pandemic related market to a more traditional market there will be noticeable changes to be on the watch out for. This month we will dive into some of the hottest topics trending now in the real estate market. As always, if you have any additional questions please feel free to contact me at the office at 530-222-3800. MARKET UPDATE FOR AUGUST 2021 Homes Sales Report For July Homes sales in the month of July fished at 300 closings, down from 363 in the month of June and down 25% from the month of July of last year. Higher home prices combined with lower inventory has contributed to the impact on the overall sales volume. In addition, the major migration pattern shifts from larger cities is showing signs of stabilizing and could reduce overall buyer demand in the local market. Homes Listing For Sale Report For July The number of home listings available for purchase is increasing. Currently there are approximately 600 dwellings available for sale up from 462 dwellings for sale in March of this year. The absorption rate (the number of months of supply) has also jumped from 1.65 months supply in March to 1.85 month supply in July, a 16% increase. These numbers may not appear all that impressive on the surface, but it does illustrate the point that home inventory relative to demand is no longer decreasing. Interest Rates Interest rates continue to remain historically low, although, in recent weeks have nudged a bit higher. Most experts predict rates to level off in the mid 3% range by the 4th quarter. As interest rates increase, the purchasing power of the average buyer diminishes slightly. For every 1% in rate increase, a borrower's purchasing power is reduced approximately 10%. Provided interest rates do not increase quickly, it is likely that overall effect of rates on home prices will remain marginal. However, if interest rates increase abruptly, there could be a corresponding effect on home prices. Opportunity For Transitioning Home Sellers The recent changes in home inventory may serve as an excellent opportunity for transitioning home sellers. As the inventory increases, existing homeowners will have more options of homes to choose from for purchase. At the same time, homes are still selling quickly- which means the process can be completed with less stress and concern. The Media Impact The future of the real estate market has been a popular discussion for many. Smart people on both sides of the issue have excellent points. One topic most experts agree on in the current state of the market is due to extremely low inventory relative to the demand, combined with historically low interest rates. As these major factors begin to shift we can all expect news organizations to pick and choose eye catching headlines that grab attention. If the factors of supply relative to demand and interest rates adjust slowly, the market will likely transition to a more balanced market. The Future For Real Estate The long term prospects of the real estate market are positive. The country simply does not have enough existing housing units to need the demands of the future. However, we currently have a housing market the at is largely a reflection of a pandemic. How these two issues reconcile is what makes this market very interesting. In the short term, the overall housing market and economy has to rebalance. In the longer term, the market will have to grow to meet the growing needs. Below are a collection of slides that correlate with many of the topics discussed in this mid-year review. Please feel free to contact our office with any additional questions you may have. 530-222-3800 Learn more about Josh Barkers 5 proven steps to selling your home by visiting Your home sold Learn more about Josh Barker's proven ideal investment formula by visiting Buying home Check the average value for your home instantly by visiting Home value Make it a great August! Josh Barker P.S. You can view all of our past real estate market updates by visitingBlogs
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