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Friday, July 13, 2018

July 2018 Market Update


Click here to watch Josh's video blog for the month of June.From The Desk Of Josh Barker @ RE/MAX


Welcome to our mid-year review for the year of 2018.

Sales in Shasta County for the month of June were down by almost 2% compared to June of 2017. Our pending home sales have begun to show signs of leveling off as well compared to last month. This indicates that the month of July will likely have fewer homes close escrow than in the month of June.  As home sales begin to slow down, we will start to see the volume of inventory level off as well. This could translate into fewer transactions in the later part of summer. We should be prepared for some media outlets to talk about sales being down for the month of July.





Home Inventory levels are up by over 9% when compared to June of 2017. This is definitely having an impact on the market.  From May to June, there was a large jump in the average number of days a house spent on the market. This spring,  home sellers had attempted to push the price of their homes up, at an even greater rate than before, and that resulted in more inventory on the market. However, a lot of those homes ended up selling below their asking price. When home buyers push the prices up in this manner, their homes tend to sit on the market for a longer period of time. This can encourage buyers to make lower offers.



In the past, and while the housing market was recovering, the rate of appreciation hovered around the 10-11% range.  Home appreciation has recently slowed down to a more modest level between 5-6%. The slide below shows that home appreciation is leveling out. Zillow recently featured a graphic of their data and predictions for the next year in the Redding Metro area. Over the next year, Zillow anticipates just over 5% of appreciation.  The additional slide below shows data on the projected future appreciation. In 2018 it indicates around 5.8% appreciation.  The following years of 2019 and 2020 the rate is expected to slow down and eventually end up at around 3%.




Now because home appreciation has been slowing down, we have also begun to see home builders become more conservative. You can see in the slide below that the total number of permits pulled year to date is down by 10 permits from this time in 2017. Although 10 fewer permits is not a large number, it is important to note that the number of permits hasn’t grown. Builders are pulling fewer permits than last year, which is an indication that they are not confident enough in the market's ability to appreciate "fast enough" to continue investing in new construction at high levels.




Mortgage rates in the country were averaging at around 3.5% in early 2017. By the end of 2017 we watched the interest rates rise to the mid-4% range. Now in 2018, we are watching the rates go up into the high 4% range. The slide below indicates where experts believe the rates are headed in the years to come. Rates are expected to be at or above 5% next year. When mortgage rates go up, it has a significant impact on what buyers qualify for when they apply for a loan. For example, if a buyer qualifies for a home loan amount of $300,000 when the mortgage rate is at 4%, that same buyer will only qualify for a $270,000 home loan when the rate increases to 5%. Increasing mortgage rates will have an impact on the housing market.




The rental market continues to show signs of inflation. Anyone out there who is currently renting knows how difficult it is to find a great and affordable place. The slide below shows the increase in rental rates over the years. As rental rates increase, the cost of living as a renter will, unfortunately, continue to go up over the years as well. Home ownership is an excellent hedge against inflation since homeowners secure a mortgage, have locked in their housing costs, and will not be subject to the fluctuations of the rental market.




Wall Street has been waking up to the fact that the housing market is a safe place to invest. In the slide below, you can see that America thinks that Real Estate is the best choice for long-term investment. Traditionally, the stock market was thought to be the safest place to invest. However, you can see that opinions are already changing.




Home values in Shasta County are changing. Check out the value of your home instantly by using our free home valuation tool. Simply enter your property address and we will provide comparable sales to your home and project an estimated value instantly.



As always, if you have any questions, please feel free to respond to this email or contact me at 530-222-3800.

Have a great July!

Josh Barker

Wednesday, June 6, 2018

June 2018 Market Update

Click here to watch Josh's video blog for the month of June.

From The Desk Of Josh Barker @ RE/MAX

By now everyone has heard that interest rates will be increasing. For years and years, we have heard rumors of rate increases and yet, until now, they have remained relatively the same. As you can see in the graphic below, interest rates have started on an upward trajectory and are expected to continue to rise. If buyers neglect to pay close attention to the rising interest rates, they might find themselves priced out of the market. For every percentage point that the interest rate increases, purchasing power is impacted negatively by almost 10%! For example, if a buyer qualifies for a home purchase of $300,000 when interest rates are at 4%, the same buyer will only qualify for a $270,000 purchase if the rate jumps to 5%. As a result, the types of homes that are within a buyer’s budget will change. An interest rate increase will impact our local market.



As interest rates are on the rise, we are also seeing an increase in the availability of financing. The graphic below represents what the availability of financing looked like during the housing boom of 2005 and 2006. You can see how high it was then, before the market started to correct and decrease rapidly. Lenders responded quickly by tightening down on the availability of financing. But now we're beginning to see availability trend back up again. Although it is nothing like it was back then, you can see that lenders are beginning to loosen guidelines as they raise the interest rates. In part this is an effort to keep the buyer market stable, in terms of demand versus supply, as interest rates rise.















As you can see in the graphic below, the rental market is still very tight. We have been talking about rentals frequently in our market updates. As you can see in the graphic below, the rental market is still very tight. If you were to go looking for a place to rent today, you're most likely going to find yourself competing against multiple tenants. There just aren't as many rentals available today as there have been in the past. As a result, we're seeing rent rates continue to increase and the availability of rentals decrease. This results in a tough experience for people looking to rent. If you're a homeowner who is thinking about selling your home and moving into a rental, keep this in mind as you consider your options and make sure there are properties available for you to rent throughout your relocation process. If you are considering moving from your current home, our instant property valuation tool can help at www.shastahomevalue.com.














Home sales for the month of May were up slightly compared to one year ago. In addition, the number of homes available for sale is also slightly higher compared to one year ago. In the graph below you can review the number of homes for sale and homes that have sold broken down by price range.



Home values in Shasta County are changing. Check out the value of your home instantly by using our free home valuation tool. Simply enter your property address and we will provide comparable sales to your home and project an estimated value instantly.



As always, if you have any questions, please feel free to email me at josh@reddinghomes.com or contact me at 530-222-3800.

Have a great June!

Josh Barker

Wednesday, May 2, 2018

May 2018 Market Update


Click here to watch Josh's video blog for the month of May.

From The Desk Of Josh Barker @ RE/MAX

This year represents the 6th consecutive year of appreciation in the housing market in Shasta County. However, not all price ranges are performing the same. For example, for homes under $300,000, it is still a sellers’ market. If you are a home buyer shopping in this price range, it is easy to find yourself in a situation where there are multiple offers on the property you are interested in purchasing. If you have participated in any “multiple offer” situations recently it is a frustrating feeling for sure. With very little construction taking place in this price range, this is likely to remain the case for the next several years. Check the value of your home instantly at www.shastahomevalue.com.

The upper-end market over $450,000 has not performed as well. Although there are sales taking place at a higher rate in this price range than years past, appreciation has been visibly lower. There are several contributing factors. First, with the cost of new construction on the rise, many builders have been pushed into building higher priced homes in order to realize a modest profit. These new homes can shift demand from existing resale homes towards new construction. Secondly, due to a visible ceiling on local wages, there are far fewer buyers available to purchase these higher priced homes. Out of town buyers have been the silver lining in maintaining stability in the upper-end price range.


The middle market between $300,000 and $450,000 has surely been a mixed bag. This price range has experienced some appreciation but has also been visibly picky. Not all neighborhoods have performed the same and unlike the lower price ranges, the condition of these homes has a major impact on the final selling price.


In nearly every area of the county, the cost of renting has increased and is dangerously close to being unaffordable. With very few affordable housing projects on the books and the lack of higher density housing being constructed, the crunch on rent affordability will likely continue. The affordable rent crisis that is likely coming is the primary reason I am such a strong advocate for purchasing a home when the opportunity presents itself. Locking in a fixed living expense has always been the safest way to obtain wealth, and since you are paying for housing, either way, it’s always a good idea to pay yourself.


Lending guidelines are loosening. Many buyers are much more educated than in years past when it comes to financing. Some of these buyers have already been through a short sale or foreclosure in the past and are much more conscious about purchasing homes that they can actually afford. Clearly, this is a good thing and lenders have slowly loosened guidelines to welcome these types of buyers back into the market. With this added supply of home buyers and the boost of a strong economy, the FED is raising interest rates. Experts all agree that rates will continue to rise and the Fed has continued to forecast this intention in order to reduce surprises. 

The next housing market correction for Shasta County will not likely be as dramatic as you may think.  First, home buyers in today's market are using fixed mortgages to purchase homes. It was the interest only, negative amortization, and balloon payment loans that contributed to the last housing bust. Second, the lack of abundant new home construction in our local market will keep the supply of homes in check. Finally, the next housing correction will likely be more psychological than factual. After a long run of home appreciation, it is likely that some “would be home buyers” will want to wait for prices to drop. This reduction in buyer demand may have a temporary impact on the number of home sales and home prices in turn.  Although this may occur on some small scale, once it is clear that there will not be a “housing crash” home prices will likely stabilize again quickly. For those that have been around real estate for decades, none of what I am saying is new, it is simply a real estate cycle.


As always, if you have any questions, please feel free to respond to this email or contact me at 530-222-3800.

Have a great May!

Josh Barker

Wednesday, April 4, 2018

April 2018 Market Update




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

From The Desk Of Josh Barker at RE/MAX,
The real estate market has continued to perform well in the first quarter. Sales are strong and prices are inching up in most price ranges. The spring is sure to bring lots of new homes to the market for sale and a large supply of buyers ready to purchase. This month we will review several of the hottest topics trending now. As always, feel free to contact me with any additional questions. Have a great start to spring!

Your Realtor,
Josh Barker


Interest Rates
Interest rates appear to be one of the hottest topics buzzing around the market at this time. Last year, the average 30-year mortgage interest rate was averaging just below 4%. Currently, the average rate is averaging 4.75% for the same 30-year fixed mortgage. For those that have seen interest rates much higher in the past, this may not sound like a big deal. However, home appreciation in Shasta County can be impacted by higher interest rates. If a home buyer's purchasing power is impacted by rising rates, it could have an impact on demand, which in turn can impact appreciation. We will be watching this closely in the months to come.




Home Sales
Home sales in the month of March declined to 235 compared to 267 sales the year before. This year home sales started well ahead of the previous year. However, the year-to-date home sales of 652 have remained the same year over year. Clearly, the year to date sales is good news. We will have to watch the month of April closely to see if we are developing a declining trend or if March was an anomaly. If the trend continues, it may be the first sign that the rise in interest rates is having a negative impact.




New Construction
New construction in Shasta County is beginning to pick up some steam. Most of the attention for new construction is focused around Salt Creek in West Redding, off Airport Road in East Redding, and behind the Walmart in Anderson. There are several additional projects scattered around other areas as well. We are on pace to exceed housing starts throughout the county compared to last year. This is a great addition to the local market. Not only does new construction create jobs, it also eases the burden on an already tight housing market.

Check out the new construction by visiting www.reddinghomes.com/new-construction.

Rental Market
If you have been on the hunt for a rental, I do not need to tell you how tight the rental market is. The vacancy rate is far below historical averages and I would venture to say it is the tightest I have seen it since the year 2000. Rental rates have increased quickly, and from the looks of it, rates are likely to rise more. The State, Shasta County, and the City of Redding have all recognized the problems that this creates and the impact it has on the cost of living. I expect to see re-zoning, building fee incentives, and smoother approval processes in the future. If the City of Redding gets ahead of this issue quickly, there will be a real opportunity to ease the rental rate burden and create an even more attractive incentive to live in our beautiful community.



Home Values
The average sales price in Shasta County is currently averaging around $267,000 per year to date compared to $265,000 one year ago. The lower end market has experienced the most appreciation over the last year. Higher priced homes have appreciated far less but have been selling at a higher pace compared to years past.

You can check the value of your home instantly by visiting www.shastahomevalue.com


On a personal note, I wanted to share that because of you and your amazing referrals, we were ranked #1 in the RE/MAX network for the state of California in 2017. This is only possible because of the great clients we have had the privilege to serve. On behalf of our entire team, we would all like to say thank you for all your support and for entrusting us with your referrals. We appreciate you very much. As always, if you have any questions, please feel free to respond to this email or contact me at 530-222-3800.


Have a great April!


Josh Barker

Friday, March 2, 2018

March 2018 Market Update


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

From the desk of Josh Barker,
First and foremost, Thank You! Thank you for all of the great responses we receive from these monthly market updates. I appreciate your feedback and questions. It truly makes these updates a lot of fun to prepare each month. 
This month I will be reviewing several of the hottest topics trending now in our local market. Enjoy the information. If you have any questions please feel free to contact me. 
Have a great start to March!
Your Realtor,
Josh Barker

Home Inventory
Home inventory in Shasta County has remained extremely stable for the first 2 months of the year. Numbers are averaging nearly 840 homes for sale compared to 850 homes just 1 year ago. The stable supply of homes is providing much-needed inventory for buyers to choose from and is also keeping home appreciation at healthy levels. 
Interest Rates
Interest rates are currently averaging near 4.5% for a 30 year fixed mortgage. This rate change is a noticeable increase from the 3.75% interest rates of less than 1 year ago. Interest rates will continue to be a factor that will have to be watched closely. When the interest rates increase by just 1%, the borrower's purchasing power is reduced by approximately 10%. Higher interest rate environments can eat away at home appreciation in a market like Shasta County.  
Rental Market
Vacancy rates (the percentage of homes waiting to be rented) have remained very low in the residential rental market. This low rate has translated into higher rent and shorter turn over periods. With the continued squeeze on new housing, rental properties are in extremely high demand and there is no sign of this changing anytime soon. If you are considering purchasing a rental or converting a home you currently live in into a rental, now may be an excellent time to do it.
Home Appreciation
It is still too early in the year to report on home appreciation for 2018. We will be closely watching the new listings coming to the market in the early spring. We can typically expect to see home sellers test the market a bit and push asking prices a little higher than the previous year. If it works, homes will sell for more money. If it does not work, we can expect to see price reductions starting in late spring...I will report back on this topic in a few months.
In the meantime, if you would like to check the approximate value of your home instantly, visit www.shastahomevalue.com. I pay for this service each month and offer it to all of you for free. It is by far the best home value estimate I have been able to get my hands on.
Thanks again for reading and, of course, if you have any questions about buying or selling a home, feel free to contact me directly at 530-222-3800.
Make it a great day!
Josh Barker

Monday, February 5, 2018

February 2018 Market Update


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

From The Desk Of Josh Barker,
The weather in the Redding area is amazing! We are surrounded by snow capped mountains, the air is crisp and clear, and people are out and about enjoying all the beautiful activities the Northstate has to offer. Many home buyers are out shopping early this year largely due to the weather as well. This month we will discuss several of the hottest topics trending now in our local market. Enjoy the information and of course feel free to contact me with any additional questions.
Your Realtor,
Josh Barker

Home Sales
Home sales in January started out strong and mirrored the sales volume of January of last year, finishing at 200 home sales. The noticeable change was in the pending home sales. In January there were 276 homes that went into escrow, up 34% compared to last January. The increase in pending home sales I believe can be contributed to the favorable weather. Last year, we had a lot of rain in the first quarter of the year.

February 2018 Home Sales in Shasta County

Home Inventory
Home inventory nationally is continuing to trend down. This reduction in "supply" is causing home prices to increase and is having an impact of affordability in larger markets. Locally, home inventory is averaging near 815 homes for sale down by 4% compared to last year. The stability in home inventory locally is allowing for modest appreciation and is keeping home affordability in check.  


Interest Rates
Interest rates have trended up over the last 6 months. 6 months ago the average 30 year fixed mortgaged averaged around 4%. Currently 30 year fixed mortgages are averaging 4.5%. Clearly interest rates play a role in overall home prices in our local market due to the fact that over 80% of all local purchases involve bank financing. For every 1% that the 30 year mortgage rate increases, the average home buyers borrowing power is reduced by up to 10%.  

30 Year Fixed Mortgage Rates by Freddie Mac

New Construction
New construction in the Redding area is continuing to increase. New housing permits for 2017 in the city of Redding finished at 150 permits pulled up 10% compared to 2016. It is projected that we will see even a higher rate of new construction in 2018 as home prices increase, allow for builders to take the calculated risk of building at a higher rate.

City of Redding New Construction

City of Redding Fees and Permits
The City of Redding has taken a proactive approach to new construction and slashed fees associated with building permits. This is a very proactive step towards stimulating the housing economy and will contribute to overall home affordability in the long term. I truly believe that the best way to provide affordability housing to our local market is to simply increase the supply of homes available. It's a simple example of "supply and demand".

New Home Sales

The Spring Rush
Typically we experience an increase of homes coming to the market for sale in the spring. If you are considering selling your home this year, or if you are considering a home improvement before listing your home for sale, let's talk. I can assist you in determining the best approach. Designing a plan up-front could put thousands of additional dollars in your pocket at closing.

Check Your Home's Value Instantly!
If you would like to check the value of your home instantly, check out our free home valuation tool that is designed for our local market. www.shastahomevalue.com 

If you would like to review my marketing plan designed to sell your home at the highest price visit www.reddinghomes.com/selling-your-home

I want to take a moment and say thank you for all the amazing referrals that you have sent my way over the years. We appreciate your support and look forward to assisting you with all of your real estate questions and needs in the future. 

Make it a great February!

Your local Realtor,
Josh Barker

RE/MAX Town & Country
Lic#01277485

530-222-3800
530-215-2980 (fax)

www.reddinghomes.com
www.shastahomevalue.com

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