TIPS FOR BUYERS Category
Redding/Shasta County Real Estate Market Update
INDUSTRY NEWS, SHASTA COUNTY, SHORT SALES, TIPS FOR BUYERS, TIPS FOR SELLERS
Distress sales continue to represent a significant number of homes selling in today’s market. The second week of March was marked with 465 homes pending. Of these, 133 are bank-owned homes and 157 are short sales or 41% of all homes under contract. These same two segments of the market only account for 31% of the 1379 active listings.
February saw 131 homes sold. 85% were listed for $300,000 or less. More than a third of the homes sold were priced under $150,000. Ten more homes sold this February than a year ago. The number of bank-owned properties listed for sale has doubled from a year ago.
Home prices continue to slide downward as noted by a local real estate appraiser. The last quarter of 2009 saw the average cost per square foot of homes in all areas served by the Shasta MLS drop from $122.75 to $114.86. On the positive side, prices for new homes actually increased to $158.29/square foot from $147.72. However, there have been far fewer new homes sold year-to-date than the last quarter of 2009. Homes more than 5 years old in Redding sold on average for $125 the end of 2009 and for $120 thus far this year.
The area price declines can be pegged to continuing high numbers of homes in various stages of foreclosure due to high unemployment and sharp price declines after the housing market bubble burst. Banks seem to be in no hurry to clear their books of overvalued assets which prevents steeper declines in prices in the near term but prolongs the overall recovery of the housing sector.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 25 YEARS LOCAL SALES EXPERIENCE
Energy Efficient Mortgage Program Discussed
HOME LOANS, SHASTA COUNTY, TIPS FOR BUYERS
Jonathon Bell, mortgage banker with US Lending in Redding, briefed Realtors on a loan program that allows home buyers to secure a loan to buy and upgrade a home simultaneously using an Energy Efficient Mortgage (EEM). The investor for the loan allows the borrower to add funds into the loan to complete energy efficient retrofits. Most homes built prior to 1994 will qualify.
The concept allows the home buyer to borrow slightly more than they might otherwise qualify for because the higher payment will be offset by lower utility bills. The borrower must pay for a home energy audit using a local HERS (Home Energy Rating System) auditor at a cost of about $350. A report will be produced detailing which energy efficient improvements qualify for the loan program. Monthly energy savings must exceed the additional mortgage payment costs.
Common items covered include windows, HVAC systems, insulation and weatherization of doors, windows, pipes and walls. Water heaters and energy efficient appliances may also be candidates for replacement. Once the buyer selects the items to be upgraded, the loan amount is adjusted to cover the labor and material costs, the loan is closed and funds are held to pay contractors upon completion of the work.
Other benefits to an EEM may include:
- Federal Tax Rebates
- City Utility Rebates
- P,G&E rebates
Check with your tax preparer and utility providers for specific programs and rebates. Homes to be built may qualify for an EEM if additional upgrades are desired above current building codes.
For more information, call Jonathon at 530-356-8658.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 25 YEARS LOCAL SALES EXPERIENCE
Inability To Make Mortgage Payments Tops Reasons To Sell
INDUSTRY NEWS, REAL ESTATE PRACTICE, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
A recent survey of California home sellers found that the biggest reason cited for putting their home up for sale was difficulty meeting the monthly mortgage obligations. Two thirds of sellers surveyed sold their home due to financial challenges caused by job loss or increases in their mortgage payment.
Complicating factors included an inability to refinance due to declining property values and tighter loan underwriting standards. Homeowners usually explore all their options including refinance as a way to keep their home. Loan modification, short sale, deed in lieu of foreclosure and deed-leaseback are potential options available to sellers who do not want to lose their home to foreclosure.
Other findings of the survey include:
- 99% of sellers chose to work with a Realtor
- 72% cited the agent’s ability to get a higher price as the primary reason they used a Realtor
- Homes sold on average $20,958 less than the listed price
- First-time sellers accounted for 44% of all sellers-a 33% increase from 2008
- Job loss was cited by 18% of sellers as the reasoning for listing their home for sale
- Nearly three-fourths of sellers expressed concerns whether a buyer could secure a loan
- 63% of sellers lost a sale with 70% of those failed escrows due to buyer inability to get an acceptable mortgage
- 26% of buyers had buyer’s remorse and canceled the sale
- 50% stated the sale did not close on time
This year may see an improvement in some of these numbers as prices stabilize and fewer homes begin the foreclosure process across portions of the state. Unemployment rates will need to drop before a housing recovery can get a foot-hold here in the Redding/Shasta County area.
bradgreps@yahoo.com
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 25 YEARS LOCAL SALES EXPERIENCE
Need A Mortgage? Better Sooner Than Later!
HOME LOANS, INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
The Federal Reserve propped up the housing industry last year by buying up $1.25 trillion in mortgage backed securities but has told banks that will end this spring. Investors typically buy these securities but stopped after the housing bubble burst. The Fed’s actions averted certain disaster by keeping money in the loan pipeline as well as keeping mortgage interest rates artificially low. The big concern moving forward is will investors re-enter the market after the Fed pulls out ensuring a continued supply of mortgage money.
Many economists believe interest rates will have to increase to attract investors for these mortgage-backed securities. Some optimistically predict a slight rate increase from 5% currently to near 6%. Others believe rates would have to rise above 7% before investors will jump back in.
The Fed may have to step in again and buy loans through it’s GSE’s known as Freddie Mac, Fannie and Ginnie Mae in the event mortgage rates spike due to a lack of funds available for mortgages. Other government program changes will also impact the real estate market in the near future:
- The Federal home buyers tax credit is set to expire at the end of April
- Underwriting rules for the popular FHA loan program are tightening
- Many borrowers attempting loan modifications will be denied adding to the foreclosure crisis
The end result could be fewer buyers and more inventory of distress sales ultimately causing more price erosion forcing property values downward. This is likely to be the case until jobs that pay a living wage are created due to economic recovery. Some speculate that the government will extend a helping hand if their actions derail the housing sector recovery.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 25 YEARS LOCAL SALES EXPERIENCE
Housing Affordability Remains High For First-Time Buyers
INDUSTRY NEWS, LOCAL GOVERNMENT, SHASTA COUNTY, TIPS FOR BUYERS
Lower home prices combined with low interest rates bumped up the First-Time Buyer Housing Affordability Index (FTB-HAI) for California to 64%. During the bubble, this index bottomed out just over 20%. This number reflects the number of households that can afford an entry-level home assuming a 10% down payment and an adjustable interest rate of 4.5%.
I would prefer this index be calculated using a stable 30-year fixed rate loan. The high usage of adjustable rate loans caused many of the problems we are dealing with today. The California Association of Realtors (CAR) also tracks affordability for certain counties and regions within the state. The most affordable region is the High Desert at 84%. The area of San Luis Obispo won the least affordable honor at 48%.
Here’s how other regions ranked:
- United States-77%
- Northern California-65%
- Northern Wine Country-58%
- Southern California-63%
- San Diego-57%
By county:
- Sacramento County-79%
- Merced-84%
- Riverside-78%
- Marin County-40%
- San Fransisco-35%
The Redding area is lumped in with Northern California. Sacramento has higher affordability due to higher incomes. The index compares median incomes to median home prices to determine affordability. Despite a lower median price in Shasta County, lower incomes prevent our area from ranking higher by this index. Statewide the median price for the 4th quarter 2009 was $257,940. The minimum household income needed to purchase the median priced home is $44,100.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 25 YEARS LOCAL SALES EXPERIENCE
Redding Real Estate:Newer The Home, Higher The Value!
INDUSTRY NEWS, REDDING LIFESTYLES, SHASTA COUNTY, SHORT SALES, TIPS FOR BUYERS, TIPS FOR SELLERS
A local appraiser points out that homes 5 years of age or newer have the highest average value on a cost per square foot basis. The average price of a newer home is $286,172 or $155.9 per square foot. The average of homes 6 years or older drops precipitously to $116.7/square foot. All homes sold in the area served by the Shasta MLS average $121.6/square foot. To get a rough idea of what your home is worth, multiply your square footage by the average cost per square foot based on your home’s age.
My own numbers indicate homes for sale on the Shasta MLS inched up to 1329. Pending home sales have risen to 429 Monday compared to 382 one month earlier. The number of bank foreclosures listed for sale continues to rise with 176 available active home listings.. That number was less than 120 for most of 2009. 111 of the total pending home sales are bank repo’s. 138 homes have closed escrow thus far this year.
Short sales continue to be a significant part of the market. 233 sellers are trying to sell their homes for less than what is owed. Together with foreclosures, distressed sales are predicted to represent half of all transactions in 2010.
Those that lose their homes to foreclosure can expect to wait 3-4 years before being qualified to buy a home again. Members of credit unions may be able to purchase again in as little as a year. Credit unions typically hold their loans instead of selling them to Fannie or Freddie GSE’s allowing them to set their own rules for reconsideration. Divorce, medical bills or job loss may be legitimate reasons for allowing someone to re-enter the housing market on a case-by-case basis. Chapter 7 bankruptcy is likely to prevent one from buying for 5 years or more.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN A QUARTER CENTURY LOCAL SALES EXPERIENCE
Is Fed Poised To Kick Crutch Holding Up Housing Market?
HOME LOANS, INDUSTRY NEWS, TIPS FOR BUYERS, TIPS FOR SELLERS
Low interest rates enjoyed in 2009 by home buyers and homeowners refinancing may be history come March. The Federal Reserve propped up the ailing housing market by quietly buying up mortgage-backed securities and lowering key interest rates which influence costs for consumer borrowing. Lenders loaned money only because they knew government sponsored enterprises (GSE’s) were willing to buy them. The investor pool that normally buys these securities seized up during the housing meltdown forcing the government to step in before lending came to a grinding halt.
Now the Feds have decided it’s time the lending industry stand on its own. Investors will need to step up and buy mortgage-backed securities or home loans will become extremely difficult to find. Banks rely on investors to buy these loans to back-fill their balance sheets with money to loan to future mortgage seekers.
Some believe there is a pent up demand in the private sector to buy these investments. The big question is will they be willing to buy at the artificially low mortgage rates or will they demand higher returns? Some predict rates will rise to 6% or possibly 7% or higher for the popular 30-year fixed rate mortgage in order to satisfy the rate of return demanded by private investors nervous about the health of the housing sector.
The Feds may have to once again support the financial markets if they don’t buy these securities at auction. Fannie and Freddie GSE’s are ready, willing and able to buy up to $300 billion in mortgage securities during 2010 if called upon to do so. Private industry does not want government in the loan, banking or car manufacturing business so this is the next logical next step-assuming the private sector loosens their purse strings and gets back to churning money through the economy.
Other factors that could derail a housing sector recovery include:
- Tightening of FHA loan rules regarding credit and downpayment requirements
- Investors buying stocks and bonds with capital previously used to buy mortgage securities
- Expiration of federal tax credits for home buyers
- Banks destabilizing home prices by clearing their books of foreclosed properties
Lending industry insiders predict the volume of loans funded in 2010 will be half that of 2009. This could lead to the double dip recession experts have been warning about, especially in areas like ours with a fragile economy.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN A QUARTER CENTURY LOCAL SALES EXPERIENCE
Local Housing Agencies Launch Foreclosure Assistance Program
HOME LOANS, LOCAL GOVERNMENT, SHASTA COUNTY, TIPS FOR BUYERS
Shasta County, along with the cities of Redding, Anderson and Shasta Lake have landed a grant of $1 million to assist home buyers wishing to purchase a foreclosed home in designated neighborhoods. Most of Shasta Lake is eligible for the program as well as Anderson Heights and Ravenwood subdivisions in Anderson. The program has been dubbed C4-HAP. Interested home buyers should contact the Shasta County Department of Housing and Community Action at 1450 Court Street Suite 108 Monday through Friday from 8 a.m to 1 p.m. to add your name to the waiting list for loan applications.
Here are some important points:
- The program is only available until June 2010
- Purchase price is limited to $190,000 or less
- The assistance is a forgivable 0% interest silent second loan
- The loan is forgiven after 5 years
- Household income limits apply depending on household size
- Do not need to be a first-time home buyer, but you can’t presently own a home
- Property must be located in specific census tracts to qualify
- Buyer must occupy home as primary residence after purchase
- The average loan amount is expected to be $45,000
- Once the money is used up, there will be no additional funding
A single homebuyer can’t make more than $3,910/month. A family of 8 can make up to $7,370/month. The money allocated to this program will help roughly two dozen home buyers.
For more details, contact the following:
- Jodi White at City of Redding-225-4173
- Jessaca Lugo or Loree Byzick at City of Shasta Lake-275-7464 or 275-7463
- Torri Glasgow at City of Anderson-245-6431
The goal of the program is to help homebuyers purchase distressed properties which in turn helps prevent neighborhoods from blight caused by neglected vacant homes.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS REAL LIVING
CORNER OF COURT AND PLACER IN REDDING
MORE THAN A QUARTER CENTURY LOCAL REAL ESTATE SALES EXPERIENCE
Redding Home Prices Slip Further in 4th Quarter 2009
INDUSTRY NEWS, SHASTA COUNTY, SHORT SALES, TIPS FOR BUYERS, TIPS FOR SELLERS
Despite news that prices have bottomed elsewhere in California, Redding home values dived nearly $4 in the average cost per square foot in the last quarter of 2009 from $133.35/foot to $129.7/foot. The average cost per square foot year-to-year dropped from $148.16/square foot in the final quarter of 2008 representing a 12% drop in value for homes in Redding for the year.
A local appraiser tracks these statistics and reports them monthly to others in the local housing industry. These numbers are for Redding only and could be higher or lower depending on each property’s amenities. Newer homes will generally sell at a higher cost per foot while older homes will sell for less. The average home size is about 1750 square feet in Redding.
The avearge home price followed suit dropping from $260,102 in 2008 to $226,466 in 2009. According to the local paper, the median price for Shasta County finished the year at $185,000. This reflects lower values in neighboring communities of Anderson, Cottonwood and Shasta Lake City. In general, smaller homes around 1000-1200 square feet will sell at a higher cost per square foot and homes over 2000 square feet will sell for less than the average. This is due to the fixed costs associated with building a home-land and permit fees, that are about the same for any sized home.
As of Monday, January 11, 2010 there are 1313 active residential listings, 377 homes pending, 165 bank owned homes listed for sale and 215 property owners attempting a short sale. The big change here is the number of bank repo’s for sale. Last year the number hovered between 100-120 from June through October. Since October, that number has crept up steadily to today’s level. Based on the number of NOD’s (Notices of Default) being filed in Shasta County, this trend is not likely to change anytime soon. Our higher-than-average unemployment rate may be to blame.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS REAL LIVING
CORNER OF COURT AND PLACER IN REDDING
MORE THAN A QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
Olney Creek Residents In New Floodplain Not Alone
INDUSTRY NEWS, LOCAL GOVERNMENT, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SENIORS
A recent article in the LA TIMES reports tens of thousands of homeowners in Southern California are being required to purchase expensive flood insurance because FEMA has updated maps placing their homes in high-risk flood zones. Apparently, more than 150 cities and unincorporated areas in LA, Orange, Riverside, Ventura and San Bernadino counties have been notified of the new requirement.
Estimates peg the additional insurance premiums between $500-$1,700/year. Homeowners with a federally-backed mortgage (FHA, VA, Fannie Mae, Freddie Mac) will be required to purchase the costly flood insurance. More than half of all mortgages are federally insured or backed loans. Failure to purchase the insurance will result in lenders buying(forcing) the policy and billing the borrower for the policy which is usually at a higher cost than one purchased by the homeowner.
Hundreds of homeowners in south Redding along Olney Creek, east of HWY 273 have been notified the levee built about 30 years ago does not meet the revised height requirements to withstand a 100-year flood event. Property owners may be required to purchase pricey flood insurance this year. Cost estimates are comparable to those quoted for SoCal. A levee along the Santa Clara River in Oxnard was decertified just like the one in Redding, adding 1800 homes to a flood zone.
Property owners that own their property free and clear of loans can assume the risk by electing not to buy flood insurance. Others may hire a surveyor to certify the elevation of their property or home is above the designated flood zone (elevation certificate) if they believe they reside on higher ground.
Modern technology has allowed engineers to more precisely define limits of flood zones. FEMA feels they are doing homeowners a service by notifying them of a potential risk before disaster strikes.
The problem stemmed from flood maps that in some cases were more than 40 years old. In other cases, railroad berms identified on maps as providing flood protection have been eliminated. Local government agencies, including Redding, have asked the federal government for grants to fund engineering studies in affected areas to check the accuracy of the new flood designations.
Renters and homeowners in areas rezoned may want to contact FEMA for information on its National Flood Insurance Program. More than 90 insurance companies work with FEMA to offer flood policies. When purchased prior to a flood map zone change taking effect, the cost is substantially less.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS REAL LIVING
CORNER OF COURT AND PLACER IN REDDING
MORE THAN A QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
PREMIER SERVICE® is the focus of Real Estate Professionals/GMAC. We are located in Redding, CA (at the North end of the Sacramento River Valley) in the midst of river, lake, ranch and mountain terrain.
Our Customer Satisfaction Rating, based on an independent survey, exceeds 97%. This is reflected in our 2008 "QUIE" Award recognizing the TOP 10 REAL ESTATE COMPANIES in NORTH AMERICA! REP/GMAC in #2.
