Like a Tale of Two Cities. Our region is seeing increased foreclosure activity, up from an already breathtaking rate. But meanwhile, nationwide, the REO fever seems to have subsided. What’s happening here?
Nothing a few thousand more local jobs wouldn’t fix. Until then…
As mentioned at this blog, our local home sales went up in June. Statewide, the opposite was true. Here’s a brief explanation of the statewide factors affecting June sales from the Chief Economist of the California Association of Realtors, Leslie Appleton-Young.
Interesting to hear the admission that last year’s Federal Homebuyer’s tax credit only acted to steal sales from later on. Yup. Anyway, it’s interesting to note that we locally are doing better than the state as a whole. Although we need the market to be strong everywhere for a real recovery.
David Benda writes an informative article today in our local newspaper about local home sales in June this year. Home sales are up, as reported here a few posts ago. But the distribution of sales is distinctly low end, as the bulk of all local home sales takes place under $150K. See the chart below:
In fact, our experience has been that there is an apparent lack of inventory in the low end, and there are multiple offers on nearly every home in that range. Above the $200K price range, sales begin to drop off.
Interestingly, we’ve had a couple of folks tell us “home prices are going to drop another 20%.” And yet while prices are still in decline here at about 1% per month or so, demand is up. Isn’t pricing driven by demand in the marketplace? Well, maybe those folks are right and prices will continue to decline. Our crystal ball remains cloudy. But we’re not making this stuff up about seeing multiple offers on well priced homes. And not being able to find enough candidate housing for our buyers from among the shrinking pool of homes for sale. The reality of scarcity, and the perception of market price freefall are at odds, but perhaps both are right.
Here’s a big ad that ran in USA Today from the parent company of our brokerage, Coldwell Banker. It hasn’t been our experience that there’s a big pool of buyers just wondering if they should buy a house. But in case there is, please read this, and call us up so we can get you started.
By the way, we’re not finding the term “ample inventory” to apply to our area. At least not in the price range that is most popular. Quite the opposite. See yesterday’s post. All the more reason to work with somebody as dialed into the local marketplace as we are. So call!
Call or Text (530) 255 4070
We continue to see local home sales going up. But really only for homes priced under $150K. For that price, you can own a home for what you’d pay monthly in rent. A a result, we are seeing multiple offers on new arrivals in our marketplace, and a sharp reduction in available inventory. It sounds ludicrous to say in the depths of what must be the roughest housing market in many years, but frankly, for the right range, the market is HOT!
The bars show inventory expressed at Months on Hand, and as you can see, they are reduced to as low as it has been for some time. Below, the numbers behind the graph.
You may see different numbers elsewhere. We use data that defines our local marketplace. Roughly, from Lakehead to Lake California, from Shingletown to Whiskeytown.
Up to $150K is where the feeding frenzy cuts off, however. What’s missing from our market are the move-up buyers. Lack of jobs and underwater mortgages decimates our traditional source of mid-range buyer pool. That’s really too bad, since building move-up homes was a big source of local jobs. Kind of a catch 22 situation with no end in sight…
More like how few. Recent headlines about how the impending lowering of Conforming Loan limits will have an impact on the already bruised California housing market may be sensational, but will have little impact locally. Here’s an example.
No big deal for us. Here’s why. Only one house in that price range even sold around here last month.
Click to enlarge the data. There’s just not much activity above $600K around here. Interesting too that the one sale cited here started at a hopeful $895K, but ended up selling for $650K. No doubt $650K will buy you a lot of house around here.
I suppose the new rule could have some impact on Southern California and Bay Area home prices. That may in turn affect high end home sales here. But again, how much is that? Sure, there are always a few. But it will have little impact on our overall housing market. And all real estate is local. I think home builders have been somewhat fooled over the last several years by looking back on what sold before. They assume a level of expectation that exists only among a rare strata of homebuyers. Builder beware.
Turns out there’s a quite a range between the most expensive home market and the least. You can check out where Redding sits at the CB website. Well worth a look. The numbers I ran show a 4 bedroom home selling for $150K in Redding would be $550K in Cupertino. And $30K in Niagra Falls New York. Interesting stuff.
Local home prices are still in decline, amply illustrated in my last couple of posts. Sort of a glum looking trend. Unless you’re buying. Apparently, many of you have noticed…
This chart shows homes only from Shingletown to Whiskeytown, and Lakehead to Lake California. With nearly 200 homes sold last month, May sales were up substantially over April, and well over May 2010. Look for headlines in other media any day now. It’s pretty good news for agents.
For everyone else the news is mixed. Great for buyers, tough on sellers. If you are needing to sell a home or other real estate around here, you should definitely call us. This is a hell of a time to sell, but it can be done, if presented well. In truth though, you’ll need all the help you can get. We live in interesting times.
Yesterday I promised some more local real estate statistical data. Here’s another revealing chart. This one shows the dollar-per-square-foot price of home sold in Shasta County over the last 12 months. This chart too shows a peak and then several straight months of decline. Now, it’s pretty easy to figure an average local home’s relative average value. Simply multiply the square footage of the home by $100, and that’s pretty close.
This one made me question November’s results so I double checked. It’s right. There were only 129 home sales in Shasta County that month, so the average can jump over one month. The trend is pretty clear though…
Dollar-per-square-foot doesn’t mean all that much to a buyer. But it’s a good yardstick for sellers. And it’s the same general tool for appraisers and we agents.
The double dip in home sale prices nationwide is making the news, endlessly repeated by the talking head community. Seemingly confirmed by Case-Shiller. Nevertheless, all real estate is local. As Jim Gillespie of Coldwell Banker points out, it’s an index of only 20 cities. We aren’t one of them. But how are local home prices?
Wow. Average home prices in Shasta County are down 25% since November 2010. I did not expect that.
Sales are up. We’ve been busier than ever. But prices are getting hammered. We definitely have the double dip. While it’s very preliminary to look at May numbers on only June 2, the trend is quite clear. These are Shasta County only numbers from the Shasta MLS, so later numbers from Data Quick will be different. Still…
There are many caveats to this information. But evidently we are subject to the overall nationwide trend the Case-Shiller home price index further substantiates. Tomorrow, we’ll look at some further local statistical numbers. They are quite revealing.
Information is deemed to be reliable, but is not guaranteed. © 2011 MLS and FBS.
Prepared by Skip Murphy – Peak Performer Team on Thursday, June 02, 2011 1:49 PM