Are we at the local housing market bottom?

This post was published 8 years ago. Please, read this page keeping in mind that this home may have sold by now. You can always check current status by calling or texting (530) 356 4500 The Address Realty DRE # 01710206

Today I was quoted by David Benda in the local newspaper. An article about Shasta County foreclosure trends. One local broker goes out on a limb to predict a market bottom. Not me. Here’s a chart from my spreadsheet of Shasta County Home Sales since 2011.
Feb 2012 Average Prices Shasta County homesFeb 2012 Average Prices Numbers Shasta County home salesAbove, is Shasta County homes only, and the data is from the Shasta MLS. If you look at these Average prices (instead of Median), you might have called bottom in May 2011. Or last October. Meanwhile, taken as a whole, the average price has dropped $37,851 over the last 14 months.

I have said there are 2 thresholds that might set a bottom.

1. When you can’t build new for what you’d pay to buy already built.
2. When you can buy for less monthly than you’d pay to rent a similar home.

We crossed both those thresholds some time ago, but prices still decline. Another of my quotes in the article is that pricing seems to be set not by supply and demand, but by large banks and the government. With so much impact from foreclosure inventory affecting local prices, local home values are whatever they say it will be. Want to know when the market is at bottom? Ask them.

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2 thoughts on “Are we at the local housing market bottom?

  1. Bruce Ross

    “1. When you can’t build new for what you’d pay to buy already built.”

    The sad part is, until that balance returns, you won’t see anything resembling a healthy construction market. Which is to say, it’ll be years …

    Reply
    1. Skip@RHB Post author

      Not sure what “healthy” means in terms of new construction. There are always those buyers for which nothing but new will do, and so we still have builders building. Were the 2004-2005 levels of home building healthy? It hardly seems so in retrospect. With housing so cyclical, who can define healthy?

      Reply

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