REDDING AREA REAL ESTATE MARKET UPDATE
HOME LOANS, INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
December 9th, 2008
The Redding real estate market is following the normal seasonal trends of past years. Inventory 
levels are dropping and pending home sales are following suit. Today, there are 1577 active home listings and 295 homes in escrow. Inventory peaked in mid-July with 1919 active listings. Sales peaked at the same time with 405 homes pending on July 14, according to data from the Shasta Multiple Listing Service.
Distressed properties represent 289 of the active listings-132 are bank repo’s and 157 are trying the short sale avenue of disposing of their home. A short sale listing is defined as one in which the asking price is less than what is owed on the property. Thus far this year, only a small percentage of homeowners attempting a short sale were successful. Banks seem more inclined to foreclose than work out a loan modification or agree to a short payoff.
The wild card for 2009, according to several different sources, is the Alt-A loans and Option ARM loans that are due for interest rate resets from 2009 through 2011. Most of the properties working their way through the foreclosure process today are those financed with subprime loans. About 80% of the subprime loans have already experienced interest rate resets. These were risky adjustable rate or interest only loans made to borrowers with marginal credit, little or nothing in the way of a downpayment or verification of assets and liabilities. Alt-A loans are the next tier up which were made to people with decent credit scores but required limited documentation or verification. Many of these Alt-A loans will begin resetting interest rates in 2009.
As the economy struggles it is possible the foreclosure pain will spread to prime borrowers before we put this recession behind us.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS GMAC
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
