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Redding Real Estate Quarterly Update
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4th Quarter 2011
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The Quarter That Was: The 4th Quarter of 2011 showed typical, seasonal price weakness in housing, even while the number of sales remained constructive. The declines may mean that the price firming we saw in the 3rd Quarter was more indicative of a late summer rush than a larger bottoming in prices. Still, lack of inventory is becoming a problem for Buyers and prices are holding up better than they had.
The number of Sales fell seasonally from the previous quarter but ticked up versus sales in the 4th Quarter of 2010. Prices dropped in the quarter versus both the previous and year ago quarters, but remained above the lows set in the 2nd Quarter of 2011. This is the first time we've seen a stronger 4th Quarter in prices than 2nd Quarter since back in 2005. The fact that both 3rd and 4th Quarter prices exceeded those in the 2nd Quarter may seem like a small thing, but it's another indication that the down-trend in prices is changing character. Coupled with a well-established bottom in sales activity over the last couple of years, these indicators suggest further evidence of a firming market. (Continued below)
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**In the 4th Quarter of 2011 prices in Redding fell compared to the 3rd Quarter of 2011; dropping 6.62% to a median price of $165,000 from $176,700. Year over Year numbers, which account for seasonality, also fell. The Median Sales Price dropped 10.81% in that time; from $185,000 to $165,000. The Median Sales Price has fallen 48.3% from the cycle high of $319,312 in the 3rd Quarter of 2005.
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Median Price Last 9 Quarters
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4th - 09
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1st- 10
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2nd - 09
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3rd - 10
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4th - 10
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1st - 11
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2nd - 11
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3rd - 11
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4th - 11
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$200,00
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$195,000
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$193,000
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$185,000
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$185,000
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$171,700
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$160,000
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$176,700
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$165,000
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In a recent update I had noted that the "ratio of sales to new listings has returned to and stayed at pre-bubble levels." That trend has continued to the point where that ratio is now below pre-bubble levels! This is the first time I've seen this since I started tracking data back in 2000. The simple fact is that we are at low inventory levels and Buyers are having a harder time finding homes. We keep hearing that banks will be flooding the market with inventory, but we won't know the truth of that until the 1st Quarter of 2012 is in full swing.
To be clear, we would be delighted to see foreclosure activity diminishing as a larger sign of an improving economy. More specifically, we would be delighted if it was slowing down organically. Such is not the case, however. Distressed properties made up roughly 57% of all activity in the quarter, with REO sales accounting for about 38% of activity and short sales accounting for roughly 19%. These numbers show that distressed property sales remain the dominant feature of the market and it is likely that a true bottom will not form until we see these distress sales come down in a more substantive way. We see an opportunity to clear more of this inventory here in Shasta County, and we are hopeful that more of it will be released in the near future. The trick will be allowing enough new inventory on the market to satisfy Buyer demand, while not releasing so much as to drive prices further down, thus perpetuating a cycle of more foreclosures. In that regard we would rather see too little inventory than too much. Hopefully we'll see a balanced approach as the year progresses and the market will get it "just right."
We'll see what the 1st Quarter of 2012 brings.
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**In the 4th Quarter of 2011 the Median Price per Square Foot dropped compared to the 3rd Quarter of 2011; falling 5.56% from $108 to $102. Year over Year declines were steeper, falling 12.07%; from $116 to $102. The Median Price per Square Foot has fallen 48.5% from the cycle high of $198 reached in the 1st Qtr of 2006. |
Median Price per Sq.Ft. Last 9 Quarters
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4th - 09
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1st - 10
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2nd - 10
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3rd - 10
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4th - 10
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1st - 11
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2nd - 11
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3rd - 11
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4th - 11
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$124
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$123
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$121
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$116
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$116
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$106
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$101
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$108
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$102
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**In the 4th Quarter of 2011 the number of Closed Sales fell compared to the 3rd Quarter of 2011; dropping 18.83% to 306 from 377. Year over Year Sales, which account for seasonality, rose slightly; gaining 1.66% from 301 to 306. The number of Closed Sales this quarter was 44.0% lower than the cycle peak of 546 sales in the 3rd Quarter of 2005. |
Number of Sales Last 9 Quarters
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4th - 09
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1st - 10
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2nd - 10
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3rd - 10
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4th - 10
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1st- 11
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2nd - 11
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3rd - 12
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4th - 12
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349
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219
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317
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311
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301
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252
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352
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377
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306
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Buyers and Sellers can both benefit from understanding the current market movements and implementing strategies accordingly. Please feel free to call or E-mail Me if you would like to discuss the most current trends.
**This information comes directly from the Multiple Listing Service provided by the Shasta County Board of Realtors. It represents real estate activity recorded on the MLS as of a certain date. The data is believed to be reliable but is not guaranteed.
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Redding Real Estate Quarterly Update
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3rd Quarter 2011
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The Quarter That Was: The 3rd Quarter of 2011 showed a welcome rise in prices over the previous two quarters. The number of sales also continues to be constructive. While seasonal strength is not surprising, prices may be reflecting something different in the supply/demand equation.
The 3rd Quarter is typically the strongest of the year for prices. Even during the downturn of the last 5 years, 3rd Quarters have held their own. The strength of the rebound was a bit surprising though, as the 1st and 2nd Quarters were showing dangerous signs of acceleration to the downside. The number of sales was also very constructive, with the most recordings since the 2nd Quarter of 2007. This was true last quarter as well, which points to an acceleration of an already healthy trend of higher market activity. Distressed properties made up roughly 52% of all activity. This was down from 57% in the 2nd Quarter and 64% in the 1st! (Continued below)
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**In the 3rd Quarter of 2011 the Median Sales Price in Redding rose nicely compared to the 2nd Quarter, gaining 10.44%, from $160,000 to $176,700. Year over Year numbers, which account for seasonality, fell 4.49%; from $185,000 to $176,700. The Median Sales Price has fallen 44.7% from the cycle high of $319,312 in the 3rd Quarter of 2005. |
Median Price Last 9 Quarters
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3rd - 09
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4th - 09
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1st - 10
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2nd - 10
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3rd - 10
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4th - 10
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1st - 11 |
2nd - 11
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3rd - 11
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$214,000
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$200,000
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$195,000
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$193,000
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$185,000
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$185,000
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$171,700
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$160,000
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$176,700
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While these are all promising signs of a potential bottom in prices, something a little strange happened during the quarter that needs to be noted. For whatever reason, banks appear to be holding inventory off the market, even as their is higher demand for it. This appears to be setting an artificial floor beneath prices, as the demand for homes is chasing smaller and smaller inventory. This serves to drive up prices. Furthermore, it would not be a surprise to see this trend continue in the 4th Quarter, as banks are typically reluctant to foreclose on homeowners during the holidays. Rumor is that banks will be flooding the market with new listings again in the spring of 2012. If so then we'll really test whether the firming in prices is a direct result of this inventory manipulation or something more sustainable. We may not really know where are with this market until perhaps the 2nd Quarter of 2012. For now sales activity remains very constructive. We'll reserve judgment on prices, however, until we see more data. In the meantime ...
Happy Holidays All!
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**In the 3rd Quarter of 2011 the Median Price per Square Foot rose compared to the 2nd Quarter; gaining 6.93% from $101 to$108. Year over Year declines were minor, dropping 6.90%; from $116 to $108. The Median Price per Square Foot has fallen 44.9% from
the cycle high of $198 reached in the 1st Qtr of 2006.
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Median Price per Sq.Ft. Last 9 Quarters
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3rd - 09
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4th - 09
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1st - 10
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2nd - 10
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3rd - 10
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4th - 10
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1st - 11
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2nd - 11
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3rd - 11
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$132
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$124
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$123
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$121
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$116
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$116
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$106 |
$101 |
$108
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**In the 3rd Quarter of 2011 the number of Closed Sales increased by 7.10% compared to the 2nd Quarter; from 352 to 377. Year over
Year Sales, which account for seasonality, rose a robust 21.22%; from 311 to 377. The number of Closed Sales this quarter was
31.0% lower than the cycle peak of 546 sales in the 3rd Quarter of 2005. |
Number of Sales Last 9 Quarters
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3rd - 09 |
4th - 09 |
1st - 10
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2nd - 10
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3rd - 10
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4th - 10 |
1st- 11 |
2nd - 11
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3rd - 11
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320
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349
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219
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317
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311
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301
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252
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352
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377
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Buyers and Sellers can both benefit from understanding the current market movements and implementing strategies accordingly. Please feel free to call or E-mail Me if you would like to discuss the most current trends.
**This information comes directly from the Multiple Listing Service provided by the Shasta County Board of Realtors. It represents real estate activity recorded on the MLS as of a certain date. The data is believed to be reliable but is not guaranteed.
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