Here’s our usual monthly chart of local home sales in and around Redding.
Sales are off by a little. The most notable trend is the overall low inventory evident over the last 12 months versus the prior 12. The bars indicate months of inventory available if we sold at our current rate and no new homes came on the market. 6 months inventory is widely considered a healthy condition. You can see, that’s about where we’ve been running. Here’s the numbers behind the chart:
While this seems healthier than than the 2010 numbers, what we’re feeling is a distinct lack of homes for sale in the greater Redding area. Buyers are being told “it’s a buyer’s market,” which is true enough. But when you actually get out and start looking at real homes, it’s pretty slim pickings at the popular price points.

What this means for you. If you’ve been thinking of selling, conditions are much better than they were a year ago. We need listings. Contact us to go over your home’s present value, and learn about our unmatched marketing program at no obligation. (530) 244 7603

This graph illustrates the trajectory of Shasta County’s median home prices for the last decade. I plotted the data from David Benda’s recent article in the Record Searchlight about the 15% increase in home sales we saw in 2011 in Shasta County. Although sales are up, inventory is down. You would think demand would drive prices up. I can’t predict just when, but it seems likely at some point the current price decline trend will reverse.

This is a follow up to yesterday’s post about David Benda’s recent article in the Record Searchlight about our local housing sales. I pulled this data from the Shasta MLS and put it in graphic form to illustrate the trends.
For sale now in the Shasta MLS
805 homes are for sale in Shasta County. Inventory is down quite a bit.
91 are bank or govt. owned. (REO)
216 are short sales.
38% of the available inventory is distress sales.

Sold in 2011
2113 homes sold in Shasta County in 2011, up 15% over prior year.
961 were bank or govt. owned, up 30% over prior year.
260 were short sales, an increase of 54% over prior year.
58% of all sales in 2011 were distress sales.

Sold in 2010
1838 homes in Shasta County in 2010
738 were bank or govt. owned
169 were short sales.
49% of 2010 sales were distress sales.

A few quick observations. Although a large portion of sales last year was bank or government owned (REO), you can see in the top chart, it represents a small proportion of what’s for sale. REOs are in high demand and drive the market. Also of interest is that short sales are numerous in our inventory, but represent a small proportion of actual sales. Although that fraction grew from 9% in 2010 to 12% in 2011, short sales are still very difficult to get done.

“Home sales jump in December, reaching highest level in four years

Highest levels in 4 years point to market rebound”

Well, we hope that’s true. It’s a hopeful article about our local housing market, pointing to a 15% rise in home sales, year over year. Yay!

That being said, there are something like 77,000 housing units in Shasta County. Last year, about 250 more homes sold than the year previous (the noted 15% increase). That works out to .003 of the total market. I’m not sure that three one-thousandths of the market is enough for meaningful trend spotting. Although sales were up, prices were down. That seems important.

With something like a quarter of all homes with mortgages owing more than their home can sell for (underwater mortgages), the price trend is still going in the wrong direction. Until that price trend reverses, housing activity will continue to remain depressed.

Then there is the so called shadow inventory. Scattered throughout the county are a number of homes in some state of pre-foreclosure. Some, like the example below, remain in this limbo for extended periods. How many homes are coming, and when will they be put up for sale?

Great time to be a buyer though. Low interest rates and low prices. We know there are still more foreclosures coming, although inventory is currently low. You can always see all the local housing inventory without registering at TheAddressRealty.com. And you can always find a full list of distress sale properties that are actually available at ReddingForeclosures.info. Both sites work great on your smartphone or tablet computer.

There has been noticeable sharp drop in the number of local homes for sale around here. We have more buyers than homes to buy. In an ordinary marketplace, the laws of supply and demand would force prices higher, but this is housing in 2012. Housing supply and financing availability is set by the government. Fannie Mae, Freddie Mac, and the HUD organizations trickle out the supply of foreclosures for sale, and are the only game in town for 30 year financing. So home prices are simply whatever the government says (or does). Home prices are still mostly below replacement cost, held down artificially, from what we can see.

As of today, there are way less than a thousand homes for sale total in the Shasta MLS. There are just under two hundred sold every month lately. So roughly speaking, that’s a very low supply of less than 5 months worth. Many of our sales are foreclosures and short sales, a category we call distress sales. Here’s the latest numbers from website Redding Foreclosure Deal of the Day.

Jan 2 2012
134 bank-owned homes for sale
146 bank-owned homes pending sale
224 short-sale homes for sale
194 short-sale homes pending sale
3 HUD homes for sale

For most of 2010, the number of bank and government owned homes (REOs) was over 200 on any given day, and in 2009, it was often over 250. With a large portion of local sales coming from this inventory of bank and government owned foreclosed homes, the low numbers are having a real dampening effect on buyer choice. Good deals do trickle in, but are quickly snapped up, with multiple offers on the table.

We should be able to look back on 2012 shortly, as the sales data gets entered from the busy last week of 2011 (we closed 3 in just one day!). Stay tuned to see the trends reviewed here at Redding Homes Blog.

Here’s an update on the California statewide housing market from and economist for the California Association of Realtors. Remember, all real estate is local, so stay tuned here for the latest local trend information, like our prior post.

Inventory is down, sales are relatively steady. Demand for homes under $150K is very strong.

Below, the numbers behind the graph. Sales off just a bit from last month, but inventory is trending lower.

You may see other numbers elsewhere. We use local sales reported to the MLS in the region consisting roughly of Shingletown to Whiskeytown, Lakehead to Lake California. That seems to be the significant Redding area home sales area. We could use more homes for sale on the low end. We have willing buyers.

Feeling squeezed?

According to the latest Case Shiller index, national home prices have been squished down to values not seen in nearly a decade.

Low prices are good, right? Well, not if you’re selling. Good for buyers though.

All real estate is local. Redding’s local newspaper elaborated on the home price news, giving it a local spin. I thought it was accurate.

As the month ends today, I will be looking back at November’s local home sales in a few days.

Local housing inventory for sale is down. From our perspective on the ground, we’re seeing an increase in serious buyers. In addition to regular homebuyers, real estate investors seem back in the game. This is quite different than the dynamic we’ve experienced over the last couple years. October was a slow month for home sales, but only because we don’t have the inventory to supply willing buyers. That’s new.

One month’s results doesn’t equal a trend, necessarily. But it may be a leading indicator. In a market governed by supply and demand, this trend would ordinarily mean that prices would start to go up in response to increased demand and reduced supply. But local housing is no ordinary market. Government directly controls mortgage lending with Freddie Mac and Fannie Mae. And a combination of government and banking interests directly control housing inventory through manipulation of the shadow inventory of foreclosures and short sales. The regular laws of supply and demand are out the window. Or at least subjected to the whim of unseen forces. Here’s the latest chart:
The big bars show inventory by month over the last 2 years. It’s down. Here’s the numbers behind the chart:
Sales are off sharply, but again, not demand. You may see different results posted elsewhere. We use sales data from the Redding metro region we consider to be our local market, regardless of county lines. An area roughly from Whiskeytown to Shingletown, and from Lakehead to Lake California. With approximately 77,000 housing units in Shasta County, sales of about 168 in a month just about equals a rounding error. So it’s hard to draw any conclusions, but our subjective viewpoint is this:

It’s a bit frustrating to have willing buyers, and not much to sell.

We are sometimes asked if we’ve seen the real estate market “bottom.” Our crystal ball is cloudy, but for years now we have felt safe predicting that we will bounce along the ostensible bottom for some time. This revealing chart from the California Association of Realtors bears that out.
Still breathtaking every time I see that bubble laid out. This is for all of California, so local mileage may vary. All real estate is local. Still, this one tells the tale, of statewide housing prices bouncing and scraping along a “bottom.”