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Still no huge bump in housing market after Carr Fire

But that doesn't mean the Carr Fire hasn't affected the local real estate market. Recent numbers show buyer demand in Shasta County has slowed.

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Nearly two months after the Carr Fire was contained, the local housing market hasn't experienced the run-up in prices that occurred in Sonoma County after the wildfires that devastated that area last fall.

“We are not getting the Santa Rosa response at all here,” Redding real estate broker Brad Garbutt said.

Joe Baker, a Redding home builder, said wildfire-burned lots that have come on the market at this point are reasonably priced.

“On the flip side, you see quite a few existing homes here that I thought would fly off the market,” Baker said.

But that doesn’t mean the Carr Fire hasn’t affected the local real estate market, said Josh Barker, a broker at ReMax Town & Country in Redding. Recent numbers show buyer demand in Shasta County has slowed. But Barker says it could have been worse.

“In our office, we estimated that 10 to 15 percent of the transactions we handled last month, out of the 80 homes we sold, were people buying who related to the fire,” Barker said. “So, my point being, had these buyers that are related to the fire not been purchasing right now, our sales would have been lower, which is being reflected across much of the West Coast.”

The Shasta Association of Realtors reported 274 sales in September, down from 289 sales in September 2017 and 314 closed escrows in August.

Homes sold for a median price of $255,000 last month, up from $244,900 a year ago, but an 11 percent drop from a median sales price of $286,000 in August.

Baker, the contractor, is building homes in different areas of Redding, ranging in price from $280,000 to $400,000.

“They really don’t seem to be moving,” Baker said.

He’s building homes in Churn Creek Heights near The Fly Shop that start at $289,000 that he said are languishing on the market.

“I thought people who lost homes from Keswick Estates would come down and buy these. It’s very weird,” Baker said.

Conversely, Palomar Builders has sold 26 homes in Salt Creek Heights subdivision in west Redding since it opened in August 2017, about an average of two a month.

"So people are responding to that product," Palomar co-owner Jeb Allen said.

In the weeks after the fire, Garbutt remembers estimates that a third of the people who lost homes in the Carr Fire would chose not to rebuild and purchase elsewhere in Shasta County.

“We are not seeing a third of the people going out and buying houses, let’s put it that way,” Garbutt said. “They are not out there gobbling everything up in sight.”

Conversely, rising interest rates are expected to put more downward pressure on the real estate market. The higher the rate, the less home people can afford to buy.

The California Association of Realtors in its 2019 “Housing Market Forecast” said the rate for a 30-year, fixed mortgage will rise to 5.2 percent in 2019, up from 4.7 percent this year. The rate was at 3.6 percent in 2016.

The number of homes under contract in Shasta County was 430, down from 475 last year, Garbutt said. There are also more homes for sale today, 1,013 compared with 952 last year.

“I think some of that is the climbing interest rates,” said Garbutt, a broker at Vista Real Estate.

Barker of ReMax Town & Country said the general rule is for every one-point increase in mortgage rates, the loan amount a buyer can qualify for decreases by 10 percent.

“The majority of all buyers purchase homes based on what they can afford for a monthly payment. As interest rates go up, the loan amount a buyer qualifies for goes down in order to keep the monthly payment down,” Barker said.

Meanwhile, Carr Fire-burned lots are starting to come on the market. Drive through neighborhoods like Land Park and Keswick Estates and “for sale” signs can be seen. These are homeowners who are not rebuilding and decided to sell the property where their home once stood.

Barker has listed two lots in River Ridge, three in Land Park and one in Keswick Estates. He said all are under contract with “small, local builders.”

Lots in River Ridge are selling for around $60,000, in Land Park they’re priced between $50,000 and $70,000 and in Keswick Estates the lots should fetch close to $40,000, Barker said.

Don Ajamian, a Redding home builder, has thought about buying wildfire-burned lots.

“The thing I am a little unsure of is what the market really is going to be for new homes in these areas,” Ajamian said. “Not only do you have people who lost homes, but the community in general has emotional scars tied to this fire. So, if I am looking at it from a business standpoint, I’m not sure it’s worth the gamble. Right now, construction costs are high and going higher.”

Ajamian, though, has plenty of work to keep him busy.

“I have 14 or 15 rebuilds to do,” he said.

Ajamian estimates it will take him about two years to finish the 15 homes.

The Carr Fire destroyed nearly 1,100 homes in Shasta County.

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