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Tuesday, January 9, 2018

January 2018 Market Update

From the desk of Josh Barker @ RE/MAX

Click Here to watch Josh's video blog for the month of December

First and foremost Happy New Year! 

As I like to do each January is briefly talk about how the Shasta County Real Estate Market performed in 2017. The housing market in Shasta County remained strong throughout 2017 (even in the historically slower Winter months). In fact, home sales have increased year over year for the 3rd year in a row. With a large influx of buyers continuing to enter the market there has been an increased demand combined with a limited supply of homes for sale. This classic example of supply and demand has resulted in Redding home prices rising by an average of over 6%. 



The local Shasta County Board of Realtors released the year end report for 2017 and it shows a very minimal change as you can see by the slides below. 




Curious what your home may be worth in today’s market?
Get an Instant Home Value at www.shastahomevalue.com.



With the increase of home buyers and limited supply of homes for sale in Redding and surrounding areas, there has also been a dramatic reduction, of how long a home spends on the market. In 2016, the average days on the market (DOM) was 118. In 2017, that number has dropped to an average of 102, with many homes selling within days of going on the Multiple Listing Service (MLS).


Our proven home marketing strategies showcase your home in the best possible light to hundreds of qualified local buyers.

For more information on how we can help sell your home for more money in less time visit www.reddinghomes.com/selling-your-home.


What to expect in 2018…
Based on all of the indicators; sales volume, home prices and home inventory, we can expect to see a stable real estate market as we did in 2017. With home prices increasing this gives new home builders a margin in which to obtain a property, build the home, and sell for a modest profit. So we could begin to see more new construction starting this year and are able to assist with those current homeowners looking to move up to a newer, nicer home.

Let’s make 2018 the year for your family to move up to a newer, nicer home! If you’re ready to make that move, give us a call at (530) 222-3800 or email me directly at josh@reddinghomes.com I would be happy to discuss the options available.

Have a great start to 2018!

Your local Realtor,
Josh Barker

Tuesday, December 5, 2017

December 2017 Market Update

From the desk of Josh Barker @ RE/MAX

The new TAX PLAN and what it means for homeowners in Shasta County.

As I am sure many of you have heard, the tax plan is likely going to be approved by the end of the year. What some of you may not of heard is that there are some real changes proposed to the capital gains exemptions.

Currently if you own a home, and have lived in the home, as your primary residence for 2 years or more out of the past 5 years, you may qualify for a tax exemption for up to $500,000 of the profit. 

The new tax plan currently being proposed has language that could change the exemption of 2 years out of the past 5 years and replace it with the requirement of living in the home for 5 years out of the past 8 years. High income earners may have additional provisions to qualify for the exemption as well.

Imagine that you have lived in your home for 3 years, the home has increased in value and you expect a profit of $50,000. Currently, many home owners would simply take the profit and use it as a portion of the down payment on the purchase of another home. With the new tax plan, this transaction could trigger a taxable event on the profit gained from the sale of the home. This "new tax" would need to be factored into the viability of the next home purchase.

If you currently own a home and are thinking of selling you need to watch this video!

Click Here to watch Josh's video blog for the month of December

Bottom Line
The existing capital gains exemption is changing from a 2 year requirement to a 5 year requirement for owner occupied homes.

When selling a home consider the taxes that may be triggered as a result. You may have less money than you expected for the down payment for your next home.

Home Market Update for Shasta County

For those that enjoy our market reports, I have included a slide that reports on the number of home sales broken down by price range.


The average sales price in November for a home is averaging $275,000 compared to $265,000 in November of last year.

The median sales price for December for a home is averaging $247,000 compared to $248,000 in November of last year.

Year to date closed sales for the Shasta County market are approximately 2,924 compared to 2,844 year for the same period last year.  


You can check the approximate value of your home instantly at www.shastahomevalue.com

Shasta County Home Values

If you have any additional questions regarding real estate please feel free to email me at josh@reddinghomes.com or contact me directly at 530-222-3800.

Merry Christmas and Happy New Year!

Your local Realtor,
Josh Barker

Monday, November 6, 2017

November 2017 Market Update

From the desk of Josh Barker @ RE/MAX

As we enter the Holiday Season in Shasta County we can look back on how this year has transpired in regards to real estate. For those of you who keep an eye on our local area housing market we can clearly see that Shasta County home sales have outperformed last year by nearly 3% year to date. However, active inventory has remained steady throughout the year.  

If you own a property which requires a septic system, you need to watch this video!

Click Here to watch Josh's video blog for the month of November

There are changes that are coming to Shasta County in relation to septic systems. In the year 2000, there was a water situation that took place in the Santa Barbara area. As a result, there was water contamination and the State of California required the Water Quality Control Board to conduct an Environmental Impact Study to determine what the best measures would be to protect our water systems as a State. However we all know Santa Barbara is entirely different than Shasta County. The solution found by the State required a separation between ground water and all septic systems in order to prevent contamination. They determined that a separation of between 4 and 20 feet be applied. If we applied that new requirement here in Shasta County it is likely very few homes would actually qualify to have a septic system at all, or one that would be economically feasible to install. 

After this determination by the State, each County responded to the Water Quality Control Board with comments as to why each area would not be able to apply the stringent new requirements. Out of the comments made by local counties, a new program was adopted called LAMP, (Local Area Management Program) and each county was responsible for submitting their own report about how they planned to protect the local water system itself. 

Shasta County New Water Quality Regulations

Currently in Shasta County the minimum separation between groundwater and a septic system is 1 foot. Beginning in May, 2018 that requirement is going to change. The increase will be from 1 foot to 2 feet of separation. This may seem like a very small change, but will have a big impact on existing septic systems as well as new systems being installed in the future. We are likely going to see septic systems becoming more and more shallow. There will need to be additional engineering and design in order to facilitate an operational septic system. Pumps, raised burms, and curtain drains are some of the methods that can be adopted to create a working septic system and still meet the new requirements of LAMP.

If you already own property in Shasta County and you're thinking about selling within the next couple of years, you may want to consider obtaining a septic permit before May 2018. If submitted before May you may be able to remain under the current requirements. If you wait, you may be subject to the new guidelines. If your current system is limping along and maintenance may be needed within the next year, you may want to consider resolving the situation sooner rather than later, before the new requirements become effective. 

If you would like to learn more, I would recommend speaking to the Shasta County Environmental Health Department. The department will be able to walk you through some of the steps that are necessary in order to resolve your particular septic issue or question.

Beyond the county, if you're looking for advice from someone who actually installs septic systems, it is best to get in touch with a Registered Environmental Health Specialist. There are several of these specialists in town that qualify for the designation, and tend to have the most knowledge when it comes to solving problems with septic systems and how to meet those new requirements coming in the future.

As always we're always here to help. If you have any questions at all please give us a call at 530-222-3800 or reply to this email. We can help point you in the right direction.

Your local Realtor,
Josh Barker

Friday, October 6, 2017

October 2017 Market Update

From the desk of Josh Barker @ RE/MAX

There has been a lot of talk lately about home values in Shasta County. The average sales price in Shasta County is up by nearly 5% year-to-date compared to the same period in 2016. This month I will share a few insights on what price ranges are performing the best and what to watch out for in the future. As always, feel free to contact me at 530-222-3800 or email josh@reddinghomes.com with any questions you may have.

Have a great October!

Your Realtor,
Josh Barker

Click Here to watch Josh's video blog for the month of October

The Tale of Two Markets
I often get asked..."How is the real estate market doing" My response typically starts the same way..."Which price range are you referring to?" I respond this way because not all price ranges are performing the same. For example, homes priced under $500,000 are selling much faster than home priced over $500,000.

This slide reports on the amount of home sales in Shasta County by price range:

The reasons for the disparity are fairly obvious. The majority of home buyers in our local market can afford homes under $500,000 compared to homes over $500,000. The average family in Shasta County earns an estimated  $45,000 per year. This average wage translates into purchasing power of approximately $245,000 for a home. As the home prices go up, the amount of buyers that qualify to purchase goes down. 

You can check on the general value of your home instantly here:

The upper end market in Shasta County is typically described as homes over $500,000. The majority of these homes are sold to higher income buyers, equity heavy, move up buyers, or buyers moving into the area from larger cities. These types of buyers are fewer in number which results in fewer transactions taking place.

Due to the inherent difference in buyer demand in the local market, the types of techniques employed to market homes will very as well. For example, homes under $500,000 require a heavy marketing strategy primary targeted to local buyers. For homes selling over $500,000, out of area market strategies must be employed to ensure the greatest amount of potential buyers are targeted. 

The internet has clearly become the dominating factor in how buyers will begin their home search. One factor that all price ranges have in common is that the first showing will likely take place "online". It is for this reason that every home seller should ensure that their home shows extremely well "online". Professional photography, quality property descriptions, and quick responses to buyer inquiries are paramount when locating the best buyer for a home. 

If you have any questions regarding the sale of your home, or if you would like more information on purchasing a home feel free to utilize the links provided below or feel free to contact my office. We are always here to help.


Monday, September 18, 2017

September 2017 Market Update

From the desk of Josh Barker @ RE/MAX

We are finally experiencing a much needed cooling trend after 70+ days of over 100 degree weather!  For us Redding locals, we are accustomed to a month or two of warm weather, however, summer was unexpectedly warmer for much longer this year. Fortunately for us, we are moving into fall.  The next 10 months will remind us how beautiful our area really is. This month we will review several of the hottest topics trending now in our local market. If you have any questions, please feel free to contact me directly at 530-222-3800

Your Realtor,
Josh Barker

Click Here to watch Josh's video blog for the month of September

Shasta County Home Sales
Shasta County home sales in August 2017 were up 12% over last year, finishing at just over 300 homes sold. The increase in buyer demand was a result of younger buyers entering the housing market, as well as a noticeable increase in out of town home buyers moving into the area. We expect both of these trend to continue in the year ahead. 

Home Appreciation
Home values are up in Shasta County over last year. Currently the average sales price in Shasta County is $269,300, up 5% compared to last year. This amount of appreciation is a good number to see. Slow appreciation is what we are looking for if we want to experience a well-balanced market and avoid potential housing bubbles. 
Shasta County House Appreciation
You can check the value range of your home instantly here.
New Construction
New construction in Shasta County is continuing to pick up. We have housing projects on both the west and east side of Redding that are available now and more becoming available in the months ahead. These new homes will start in the low $300k range. Anderson is also on the uptick for new construction, with homes starting in the mid $200k range. Shasta Lake City is building primarily on the west side of interstate 5 with homes starting in the high $200k range. Cottonwood has more new construction than in years past, with homes starting in the mid $200k range. These new construction starts are a welcomed addition to the market. Home inventories for Shasta County are low, averaging at a 4 month supply. An optimal housing supply, is a 6 month supply, which provides more choices for new home buyers and existing sellers that would like to move.

 

Search new homes for sale instantly by clicking here.

Financing
Home financing is available and becoming easier to obtain. Home buyers can purchase utilizing FHA with as little as 3.5% down with a max loan amount of $275,665. Conventional financing is available with as little as 5% down with a max loan amount of $424,100. Most loans are priced with a 30 year mortgage and interest rates are averaging in the low 4% range. Lenders are easing the lending guidelines as well, with respect to debt to income ratios and credit scores. Fortunately lenders are continuing to avoid risky loan programs such as interest only loans or negative amortization loans.
Shasta County Rate Projections
We are offering more tools to sell your home than ever before. Visit www.reddinghomes.com/selling-your-home and see all the cool marketing tools we are deploying to get your home sold faster and for more money! 

I look forward to your comments and feedback. Call 530-222-3800 or email josh@reddinghomes.com.

Have a great week! 

Tuesday, August 8, 2017

August 2017 Market Update

From the desk of Josh Barker @ RE/MAX

If you've been listening to the recent news reports coming out across the country, many people have been asking the question "Are we in a housing bubble?" or "...is there a housing bubble forming?". This month I'll break down what happened during the last housing bubble in 2006 and what signals to look out for in the future.

Your Realtor
Josh Barker

Click Here to watch Josh's video blog for the month of August

Some of the hotter real estate markets in the state with very strong economies such as the bay area and Southern California may be beginning to form a bubble. These areas are primarily fueled by the tech industry and are experiencing a large wage increase, liquidity increase, and an increase from foreign investment. 


Here in Shasta County, our local economy continues to be stable, and we have not experienced any dramatic shifts in income or capital which would inflate the housing market prices beyond normal levels. All things considered we are in a very balanced housing market at this time.

What caused the previous housing bubble?


Looking back at the previous housing peak of 2006, nearly 50% of all loans were classified as "sub-prime" loans. Meaning that, the government wanted to allow more buyers to enter the housing market. The way they achieved this was to lower the credit score guidelines, lower the debt to income ratios and ease underwriting requirements. These lending practices resulted in new buyers to the market and also drove home prices up as a result.


Nearly 30% of purchases were based solely on investment or speculation. Real estate speculators are buyers who purchase a property with the intention to resell for a profit in a shorter period of time.


Close to 40% of loans were inferior loan products such as interest only or negative amortization loans. Inferior loan products are usually associated with a significant payment increase in 3, 5 or 7 years. Unfortunately, so many of these loans defaulted and fell into foreclosure since the homeowners could not afford the new higher payment.


New construction back in 2006 was at an all time high... There was a abundant re-supply of inventory to the market that was taking place at the same time we had the loose lending guidelines. 


All of these factors contributed to the perfect recipe for a housing crash.


What's going on in the housing market today?


Shasta County's housing market today is performing extremely well and is very stable. Over 90% of all home purchases are based on "prime loans" such as a 15 or 30 year fixed mortgage. Today's buyers are high quality buyers with great credit scores, excellent work history and good tax returns. Only an estimated 10% of home purchases are to investors, and very few speculators are participating in the market at all. The lending practices have improved significantly over the past 10 years, and the inferior loan products we had in 2006 are absent from the market.


New construction is currently very low and most of these homes once completed are sold in a short period of time.


What are the signals that could contribute to a housing bubble?


1. More "sub-prime" buyers entering the market through less strict lending guidelines. 
2. An significant increase in speculation and investment purchases.
3. Bad loan products including interest only and negative amortization returning to the market.
4. Massive amounts of new construction which could over-supply the market and drive prices down.
In addition to the signals mentioned, there are several external factors to watch out for as well. For example, economic factors such as employment and inflation could have an impact on housing. In addition, a significant interest rate increase could have a negative impact on home prices. These external factors play a major role in home prices and are very difficult to predict. 

If you have any questions regarding our local real estate market, please feel free to give me a call today at 530-222-3800 or email me at josh@reddinghomes.com.

Thursday, July 6, 2017

July 2017 Market Update

From the desk of Josh Barker @ RE/MAX

The temperature is rising and so are home prices in Shasta County. This summer has proven to be another strong year for real estate sales. The average sales price is up by over 5% compared to the average sales price of last year and the number of active homes for sale is remaining steady. This month we will review several of the hottest topics trending now in our local market. As always, if you have any additional questions feel free to email josh@reddinghomes.com or contact the office at 530-222-3800.

Have a great summer!

Your Realtor
Josh Barker

Click Here to watch Josh's video blog for the month of July

New Construction

As I have spoken about in previous updates, the amount of new construction taking place in the greater Shasta County area is weak compared to other markets in California. There are several factors contributing to this phenomena. The largest factor is clear... Home prices have have not reached a point in which developers can acquire property, develop the property, pay the necessary fees associated with building the home and of course realize a modest profit.

Up to this point... The majority of new construction that has taken place in our county over the past several years has been possible for several major reasons. Either, the home builders already owned the land they are developing or, the builder purchased an existing development for a fraction of its original value from 10 years ago.

Low new construction inventory often equals an increase in overall home values. It's a simple example of supply and demand. When the supply of a product (in this case homes) is constant or low, and the demand for the product is high, prices rise. This simply means as long as interest rates remain relatively low and new construction remains low, we can expect to see additional home appreciation.

As home prices slowly climb, we can expect to see an increase in land acquisitions. This is good news for property owners that have been sitting on vacant land for an extended period of time.
You can view new construction in our local market at www.reddinghomes.com

Home Marketing and What You Need to Know

The days of the office caravan are long gone. In the old days, agents toured homes prior to showing clients. In many cases, the agent selected the homes in which the buyer would view. Those days are gone, and if a home owner expects their home to be shown to perspective buyers then it better look amazing online. Statistics prove that well over 90% of buyers start their search for a home online. It is for this reason that photography and supporting marketing materials such as virtual tours, drone video, and property descriptions must be on point.

Home buyers in today's market typically play a major role in the homes that they will ultimately view in person. The more attractive the home is perceived online typically translates into the number of showings a homeowner can expect to receive. We can probably all relate to the old saying that "a picture is worth a thousand words". In real estate, "that picture" is the picture that home buyers sees first when searching online. If the first photo is amazing, the chances of a home buyer clicking on that particular listing and learning more increases dramatically. 

You can view our home marketing plan at www.reddinghomes.com/proven-marketing-strategies

Interest Rates

The average interest rate is hovering right around 4.25% for a 30 year fixed mortgage. Last summer the average interest rate was 3.75%. This certainly does not sound like much of a change, however, the Federal Reserve is claiming we can expect to see additional interest rate hikes in the future. In the short term, we do not expect to see any significant impact to the housing market due to interest rates. Keep in mind, for every 1% increase in the interest rate, a borrower will pay up to 10% more in a monthly payment.

Bottom Line

The housing market in the greater Shasta County region is very stable. We have not witnessed a crazy increase in home prices, or a major new construction boom either. These factors have all contributed to the overall stability that we a currently experiencing. The boom and busts that have plagued other markets like Las Vegas, or the Bay Area may spill over into our local market slightly, but we expect our local housing market to remain stable overall. 

You can check the value of your home instantly at www.reddinghomes.com/cma/property-valuation