TIPS FOR SELLERS Category
REDDING REAL ESTATE:2011 YEAR IN REVIEW
SHASTA COUNTY, SHORT SALES, TIPS FOR BUYERS, TIPS FOR SELLERS
2011 was another difficult year for property sellers here in the north state but buyers took advantage of low prices and near record low interest rates for financing their purchase. Sales were up while prices declined. Here is a summary of how 2011 stacked up based on data from the Shasta Multiple Listing Service (MLS):
- 2404 homes changed hands compared to 2066 in 2010, an increase of 14%
- The median price dropped from about $160,000 to $145,000 for homes sold on Shasta MLS
- The average Redding home value held steady starting the year at $106/sq ft to $107/sq ft at year’s end
- 1161 closed sales were bank-owned homes
- 258 closed sales were short sales
- Nearly 60% of closed sales were distress sales
- Inventory of active homes dropped from 1242 in January 2011 to 940 in January 2012
- Interest rates average 4% for a 30-year fixed rate compared to 4.75% one year ago
- 2011 land sales total 178 compared to 201 in 2010
- Mobile home closings totaled 129 in 2011 compared to 135 in 2010
- 25% of the closed sales sold for $100,000 or less
- 71% of the closed sales sold for $200,000 or less
- 89% of the closed sales sold for $300,000 or less
- The most expensive home sold was $2.6 million for a home in Palo Cedro
- Only four homes sold for over $1 million
- The least expensive home that sold was for $17,000 in Shasta Lake City
2012 kicked off with 904 active listings, 494 pending home sales, 134 bank owned properties listed for sale and 207 short sale listings. Of the 494 pending sales, 146 are bank owned and 178 are short sales, indicating 66% of pending sales falling into the distress category. A significant percentage of the short sales fail to close because lenders refuse the buyer’s offer with many of these ultimately being foreclosed upon or are deeded back to the bank by the owner.
The drop in median price is due to the lopsided nature of our local market where sales are focused in the lower price brackets. Rumor has it more and more bank owned properties will saturate the market in the months ahead. Thus far, sales of bank-owned properties are brisk with no lack of demand by eager first-time buyers or investors paying all cash. Home and apartment rents have remained fairly level since the real estate bubble burst in 2006.
I expect a steady increase of units sold year-to-year with 2010 being the bottom. Prices will remain soft for homes priced over $300,000 while some appreciation can be expected for homes valued under $200,000.
BRAD GARBUTT
BROKER ASSOCIATE
530-224-6767 OR 530-941-7492
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN DOWNTOWN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE
California Plumbing Retrofit Mandate On Horizon
INDUSTRY NEWS, LOCAL GOVERNMENT, REAL ESTATE LEGISLATION, TIPS FOR BUYERS, TIPS FOR SELLERS, TIPS FOR SENIORS
Residential and commercial properties built for use on or before January 1, 1994 will face costly plumbing retrofits before the end of the decade. SB 407 was signed into law by Gov. Arnold Schwarzenegger on Jan1,2010. The law will trigger replacement of older plumbing fixtures to new water conserving fixtures on certain dates.
On or after January 1, 2014, all single-family residential properties undergoing alterations or improvements will have to replace all noncompliant fixtures before certificate of final completion can be issued by the local building department.
On or after January 1, 2014 specific building alterations or improvements to multifamily and commercial properties must replace noncompliant plumbing fixtures as a condition for issuance of a certificate of completion and occupancy by the local building department.
On or after January 1, 2017 a seller of a single-family home must disclose in writing to a potential buyer the new requirements for plumbing retrofits and whether the property includes non-compliant plumbing.
On or after January 1,2019 a seller of multifamily or commercial property must disclose in writing the plumbing retrofit requirements and if any noncompliant fixtures exist in the property to be sold.
By January 1, 2019 all non-compliant plumbing fixtures in multifamily or commercial properties must be replaced with water-saving plumbing fixtures.
The law does not appear to mandate point-of-sale retrofits for single-family homes. However taking out a building permit before, during or after the home purchase could trigger the reqirement that plumbing fixtures be replaced. Home buyers will want to famailiarize themselves with the requirements in order to avoid expensive retrofit costs after purcahsing a pre-1994 built home.
BRAD GARBUTT
RELTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESIONALS
CORNER OF COURT AND PLACER IN DOWNTOWN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE
530-224-6767 OR 530-941-7492
Redding-Shasta County 3rd Quarter Housing Market Update
HOME LOANS, SHASTA COUNTY, SHORT SALES, TIPS FOR BUYERS, TIPS FOR SELLERS
Home sales in the Greater Redding area have picked up significantly year-over-year from 2010. As of today, 1844 homes have closed escrow in the area served by the Shasta Association of Realtors Multiple Listing Service.
Last year at this time, 1582 homes sold and closed. This represents a 16% increase in sales activity. Two factors contributed to the increase in my opinion-higher affordability due to lower home prices and historically low interest rates. Currently, home buyers with good credit can secure a 30-year mortgage at or below 4% and the 15-year rate is close to 3.3%! Low interest rates increase affordability and buying power for first-time buyers and investors are finding buying rental homes pencil out better than expected.
Inventory of available homes has been tight in 2011 with only 1159 active home listings available today. Last year in early October 1537 homes were listed for sale, 25% more than today. Pending home sales are higher despite the skimpier supply with 485 homes in escrow today compared to 421 a year ago.
Bank owned properties (REO’s) and short sales (distress sales) account for more than 60% of sales activity. Of the 485 pending home sales, 150 are bank owned and 150 are short sales. There are 186 active listings which are REO’s and 214 short sale listings.
Home prices continue to decrease, dropping 7.5% thus far in 2011. Last year home prices dropped 11%, which was the steepest decline since the housing bubble burst in 2007. Overall, prices are down 45.6% from the peak in 2006, The avearage sales price today of $176,299 is similar to 2002, when the average price was $174,023.
Home prices appear to have stabilized for the low end of the market for the typical Redding home (defined as a home between 1500-2000 sq ft). In the first quarter of 2011, the typical home sold at $106.15/sq ft, $107.31/sq ft in the second quarter and $108.83/sq ft for the quarter that just ended.
Of the 221 homes that sold in September 2011, 195 were priced under $300,000. No homes priced over $550,000 sold in September. Nearly 100 of th0se sales were priced at or below $150,000.
The raw numbers indicate we have two distinct markets in the Redding/Shasta County area: the very active low-end market below $200,000 and the sluggish mid-to upper-end market! If banks are holding off listing homes which would appeal to first-time buyers and investors, they should reconsider. Many, well-qualified buyers are ready, willing and able, just waiting for affordable properties in good condition to be placed on the market.
Contact me if you have any real estate questions.
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
530-941-7492 or 530-224-6767
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN DOWNTOWN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE
Redding Real Estate Market Update
INDUSTRY NEWS, SHASTA COUNTY, SHORT SALES, TIPS FOR BUYERS, TIPS FOR SELLERS
Despite all the press regarding foreclosures and their negative impact on the real estate market, Redding seems to be bucking the trends. Inventory of homes available for sale today is 1261 compared to 1575 last year at this time. That equates to roughly 20% less homes for sale, which could be the first sign of price stabilization.
A local real estate appraiser noted in his recent newsletter the average price per square foot has held steady this year at $106. The typical Redding home is 1500-2000 square feet. There are 549 homes in escrow today compared to 467 a year ago. That figure is also about 20% higher than 12 months ago.
The number of bank owned properties listed for sale (184) is down significantly from the beginning of the year (255). Where’s that shadow inventory people are talking about? We need more home listings in the lower price brackets to satisfy the strong demand.
Mortgage rates have dropped again after rising the first quarter of 2011. Well-qualified buyers can secure a 15-year loan at 3.75% or a 30-year fixed at 4.5%. The low downpayment FHA loan and no downpayment USDA loan products are still available. Those with low credit scores (under 600) may still qualify if they can tender a larger downpayment.
Short sale inventory has spiked from 211 at the beginning of the year to 225 today. Fortunately, the number of properties pending the short sale process have increased from 97 in January to 144 today.
Year-to-date 952 homes have closed escrow compared to 866 at this point in 2010 or about a 10% increase year-to-year.
It would appear many buyers are jumping off the fence and buying believing we are at or near the bottom of this lengthy market downturn. Most of the activity is occurring in the under $300,000 price range. Of the 220 homes sold in May, 204 were listed for $300,000 or less. Nearly half were priced below $150,000.
First-time buyers and investors account for the lion’s share of buyers in the home marketplace today.
530-941-7492 or 530-224-6767
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
MORE THAN 28 YEARS LOCAL SALES EXPERIENCE
Study:Homeowners Recoup Solar Invetment Upon Sale
INDUSTRY NEWS, TIPS FOR BUYERS, TIPS FOR SELLERS
Appraisers have struggled valuing homes with expensive solar arrays for loan and sale purposes. A recent study found homeowners who spend thousands on solar systems get all of the investment back and in some cases more than was spent! However, new home builders who incorporated solar weren’t as lucky.
The soon-to-be-released study was conducted by Lawerence Berkeley National Laboratory. Researchers analyzed sales of 2000 solar homes in California from 2000-2009. The resale values were compared to 70,000 comparable non-solar homes. Here are some of the findings:
- Solar systems added $5.50/watt on average
- Systems installed on existing homes saw their home values increase by $6/watt
- Solar systems cost about $5/watt to install
- New homes equipped with solar only returned $2.30-$2.60/watt
- The typical home solar system generates about 3.1 kilowatts and adds $17,000 in value
The study is welcome news to companies that sell solar systems. It is also expected that appraisers will embrace the study as supporting an increased value determination for homes equipped with solar. More importantly, homeowners are saving money and being “green”.
Builders surveyed about the significant discrepancy between returns on solar in new vs. existing homes state they view solar as one attribute among many green features added to the home. On the other hand, homeowners who invested thousands on a solar system, then sell, expect to recover their investment. Apparently, home buyers see the value of solar and are willing to pay more than a similar home without solar.
This will give solar installation companies something to crow about as they explain the pro’s and con’s of buying an expensive solar system. I suppose if enough homeowners opt to buy solar, we can postpone building more power generating facilities!
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN DOWNTOWN REDDING
NEARLY 30 YEARS LOCAL SALES EXPERIENCE
Credit Score Damage From Foreclosure Alternatives Outlined
HOME LOANS, SHORT SALES, TIPS FOR SELLERS
FICO released an analysis of credit score damage caused by short sale, deed in lieu of foreclosure and foreclosure. The bottom line is all three alternatives result in no significant difference in credit score impact. However, the better your credit score was before the delinquencies, the longer it will take for your credit score to fully recover.
The study found:
- The negative impact on one’s credit score depends on the starting score
- Regardless of the action taken, all three strategies result in about the same credit ding
- Declaring bankruptcy has the largest negative impact on anyone’s credit score
- Expect to wait 7-10 years for your credit score to fully recover from preforeclosure levels
- Short sales completed with a deficiency to the lender will result in 30-35 additional point drop compared to a short sale where there is no deficiency
Variables that determine how large of a drop one can expect include whether the borrower:
- was 30 days or 90 days late on payments
- Had a higher or lower credit score before foreclosure avoidance startegy implemented
- whether there was or was not a deficiency loss on a short sale
- whether foreclosure or bankruptcy events occurred
FICO does not divulge details about the formula used to generate credit scores. The actual credit score impact depends on many other factors so it is possible for more or less damage depending on individual credit profiles.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE
CORNER OF COURT AND PLACER IN DOWNTOWN REDDING
Redding Real Estate Market Update Q1
SHASTA COUNTY, SHORT SALES, TIPS FOR BUYERS, TIPS FOR SELLERS
The first quarter of 2011 is in the books! The Redding residential home market has been very stable thus far in 2011. 1242 homes were available for sale in early January. Today, the number of active listings stands at 1260 today compared to 1424 a year ago . Spring usually brings a spike in the number of homes listed for sale.
Pending home sales are up considerably from the beginning of the year. 494 homes are in escrow compared to 344 in early January on par with sales levels for the same date in 2010. Of the nearly 500 homes in pending escrows, nearly 200 are bank owned (REO’s) and 136 short sales. That works out to precisely 2/3rd’s of homes in escrow being distress sales - about 10% higher than a year ago.
Homes priced under $250,000 account for more than 80% of pending sales. 453 homes have closed escrow year-to-date, about 10% ahead of last year’s pace. The number of REO listings is up 77% from one year ago. Short sale listings are down nearly 10% over the same time period.
Investors and first-time home buyers make up the majority of purchasers in today’s real estate market.First-time buyers benefit from low interest rates and the fact housing affordability is way up in this part of California. However, buyers must have great credit, documentable income and, as one local lender recently joked, be willing to “bring their entire filing cabinet” to me so Ican prove your ability to repay the loan. A significant number of investor buyers bring all cash to the closing table avoiding the headaches and hurdles created by overzealous underwriters wishing to cover their hind end!
One last thought, some banks are working hard to get borrower’s loans approved, others are working hard to find an excuse to deny them a home loan. Ask your Realtor for lender referrals to avoid losing time and money working with the wrong lender.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESIONALS
CORNER OF COURT AND PLACER IN DOWNTOWN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE
Redding/Shasta County Pending Home Sales Soar
HOME LOANS, TIPS FOR BUYERS, TIPS FOR SELLERS
2011 started with 255 pending home sales according to the Shasta Multiple Listing Service as of January 3rd. Today, 405 homes are in escrow. That is a nearly 60% increase in just one month. How can this be?
Some of this can be attributed to dozens of last year’s pending listing inventory expiring on the last day of 2010. Many real estate agents schedule listings to expire the last day of the year. Once these agents realize their listings had expired, they reinstated the listings causing a spike in the pending listing count. This explains about half the spike. The other half is likely due to the upward bump of interest rates that occurred in December. Rates increased about 1/2 % from their historic low point reached in November. Buyers waiting on the fence jumped in when rates started inching upward.
The number of active listings has not changed significantly since the beginning of the year. Today there are 1251 active listings comapred to 1242 on January 3,2011. Likewise, the number of bank owned properties listed for sale is about the same as January 3- 255 vs. 253 today. Short sale listings are also static- 211 then vs. 205 today. The pace of home closings is steady at about 35 homes/week or 159 year-to-date.
Personally, I have noticed an upsurge in activity. The calls I receive on ads, signs, Internet postings and from past clients plus agent referrals are all up from a year ago. 2011 is starting off much brighter than 2010! I have to believe it is not just the beautiful spring-like weather but renewed optimism amongst those wishing to buy and sell. This may be the pent up demand beginning to unleash itself-just in time to absorb the much-talked-about surge of bank owned “shadow inventory” expected in the months ahead.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
NEARLY 30 YEARS LOCAL SALES EXPERIENCE
Experts Differ On Future of California Housing Market
INDUSTRY NEWS, TIPS FOR BUYERS, TIPS FOR SELLERS
Ask an economist, educator, foreclosure expert and developer their predictions for California’s housing market and you will get a mixed bag of responses. Leslie Appleton-Young, cheif economist for the California Association of Realtors, was optimistic in her belief California home prices will edge upward 2% in the coming year. Others predict prices to remain flat and one foreclosure expert predicts a 5% decline in prices.
Experts agree it will take years for prices to reach price levels attained at the 2006 peak. Leslie believes the moderate and low end of the market have stabilized but further price erosion can be expected for the high end of the market. Location will be an important factor determining which areas will recover first. Inland areas will not see a recovery for “a long time” according to Richard Green, director of the USC Lusk Center for Real Estate. Coastal areas from La Jolla to Marin can expect prices to recover to their peak within 5 years. Jobs will be key to price recovery.
Locally, high unemployment in the Redding/ Shasta County area and the lack of equity refugees from the metro areas will hold our market down. Key industries that once thrived here are gone and not likely to return. Service, government and recreation jobs have taken a hit with the slow national economy. Efforts by government officials at all levels to cut spending may further cripple an already battered housing industry.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVING REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE EXPERIENCE
Redding Real Estate Market Review For 2010
SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SELLERS
The last year of the first decade of the 21st century is in the history books. 2066 homes sold in the greater Redding area including Anderson, Shasta Lake City and unincorporated areas of Shasta County. 201 land parcels sold and 135 mobile homes sold, all but 18 were mobiles located in mobile home parks.
The number of active home listings plummeted to 1246 on New Years day. 356 homes were in pending escrows. Of the pending home sales, 125 are bank owned properties and 97 were short sales. The year concluded with 2 of every 3 home sales being distressed properties.
Speaking of distressed properties, 253 active bank-owned properties are listed for sale. That’s nearly 100 more than a year ago. Short sale listings account for 213 of the active listings. These are properties that are listed for less than what it would take to pay off the loan and closing costs.
Looking ahead, the Redding/ Shasta County area real estate market will continue to be dogged by impending foreclosures and tight restrictions on mortgage borrowing. My experiences of late indicate local institutional lenders are in a state of paralysis. Overwhelmed by loan applications for purchases and refinances, loans are taking months, not weeks to close. Regional lenders currently offer the best service as big banks flounder.
The entry level priced homes dominate sales activity. The median price hovers around $160,000 and homes priced under $350,000 represent more than 3/4 of all sales. Expect more of the same until the pace of foreclosures drops dramatically.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL LIVIVNG REAL ESTATE PROFESSIONALS
CORNER OF COURT AND PLACER IN REDDING
NEARLY 30 YEARS LOCAL REAL ESTATE SALES EXPERIENCE
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