HAS CALIFORNIA’S REAL ESTATE MARKET HIT BOTTOM?
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS
August 8th, 2008
Indications are the market has hit bottom in California and may be one of the first states to recover. This is based on the fact sales have been up for three months straight following a 30-month decline. Approximately 40% of the sales are foreclosure sales which helped deplete some of the excess inventory. Here in Redding/Shasta County, inventory levels have been amazingly stable since last summer’s peak of 2164 homes for sale. 2008 started with 1675 homes on the market, typical for the slower winter months. Inventory levels increased slowly through the spring peaking this summer at just over 1900 homes for sale. Pending sales in the Redding area began the year at 254 units rising steadily to current levels of just under 400.
Compared to the boom which peaked in Fall of 2005, the red hot market here saw more than 900 homes pending while only 525 homes were for sale. Fueled by low interest rates and buyers willingness to take out risky adjustable loans to fund their purchases, supply could not keep pace with demand. Local homebuilders had waiting lists and buyers could expect to wait at least nine months or, in some cases, more than a year before their home was completed. In a way, this backlog for new construction helped Redding avoid the overbuilding that has plagued other parts of the Inland Valley region of California.
As the market cooled, most builders ceased building “spec” homes allowing them to coast into the slower market with little in the way of unsold inventory. However, a few developers were caught short and lost their subdivisions in foreclosure. These subdivisions have been picked up by other builders at a discount allowing them to build more affordable homes in the near future. One local builder is contemplating offering new homes around the $225,000 price point in the near future.
The City of Redding is helping builders by cutting permit fees in half and allowing some of the fees to be paid when the home is sold instead of paying up front when the permit is pulled. Kurt Starman, Redding’s City Manager, spoke with Realtors Wednesday reviewing these incentives and other projects the city is undertaking. More information to follow in other posts.
If you have any real estate matter I can assist you with, don’t hesitate to contact me:
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
25 TEARS LOCAL REAL ESTATE EXPERIENCE
There are some fascinating points in time on this article however I don’t know if I see all of them heart to heart. There may be some validity however I will take maintain opinion till I look into it further. Good article , thanks and we wish extra! Added to FeedBurner as well
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