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December 26, 2015

In Shasta County, cheaper to rent than to buy, but just barely

Redding Record

David Benda

No surprise, it's cheaper to rent a house in most places in California than it is to buy, according to a study released by RealtyTrac.

With the price of a tract home in areas like Marin and Santa Barbara counties approaching $1 million, renting can be a relative bargain.

What may be surprising to some is that Shasta County is among those communities in California where it's more affordable to rent than buy, though it's pretty much a statistical dead heat. The percentage of your paycheck that would go toward rent versus the percentage that would go toward a monthly mortgage is 43 percent versus 44 percent.

RealtyTrac used HUD and Bureau of Labor Statistics data, and rents are based on three-bedroom properties. Home-buying affordability is based on a 3 percent down payment and includes mortgage, property tax, home and private mortgage insurance.

Average rent in greater Redding will be $1,363 in 2016, down from $1,437 this year - a 5 percent dip.

On the purchase side, the median value for a home in the third quarter of 2015 was $220,500, which is 10 percent more than what houses went for in the same quarter in 2014. For the record, values here were around $230,000 in November

As for weekly wages, they have remained pretty stagnant in Shasta County, from $724 in 2014 to $734 in 2015, a meager 1.4 percent bump. Those numbers come from the second quarter.

So with home values continuing to rise modestly since the housing crash and wages not moving much, you can see why it's getting more expensive to own in Shasta County.

But Redding mortgage broker Ken Lawrence said it's not that simple. Lawrence appreciates that for a statistical comparison a one-size-fits-all model must be used. But "there are so many variable factors in home loans these days that it's hard to say this in such a general term," said Lawrence of Silverado Mortgage. "For example, a veteran purchasing with a VA loan may have a payment that's about at the rent amount, and less if he has a severe connected disability."

Lawrence said getting prequalified early will help educate homebuyers as they get ready to house hunt. In other words, you will have an idea about your shopping budget.

"It's never too soon to start. Information is power," Lawrence said.

Meanwhile, in 58 percent of the 504 housing markets RealtyTrac studied, it's still more affordable to buy than rent. The report also shows the rise in rents is outpacing weekly wage growth in nearly six of 10 markets.

It's still cheaper to buy in California in Humboldt, Kern, Tulare, Kings and Madera counties.

New Stillwater Broker?

I came across a listing for Stillwater Business Park on Kidder Mathews' website.

Wasn't it just last January that the city extended an agreement to March 2016 with Voit Real Estate Services to list the business park?

City Manager Kurt Starman via email told me the Stillwater listing is with Voit, but it's his understanding that Voit has been acquired by Kidder Mathews.

Sure enough, according to news reports, Kidder Mathews has taken over Voit's Sacramento operations, which includes the North State and Stillwater Business Park.

Kidder Mathews assumed control on Nov. 1, the Sacramento Journal reported, noting that Kidder Mathews hired 10 brokers and managers from Voit, with plans to bring on more.

Among the hires was Sean Gallinger, who was heading up Stillwater Business Park's marketing efforts for Voit.

Kidder Mathews' did not return a phone message left last week at its corporate headquarters.

California's Tax Climate

It's far from mild. More like a winter in Buffalo.

At least that's the conclusion of the Tax Foundation, whose 2016 State Business Tax Climate Index catalog found its way to my mailbox. Yes, we still have snail-mail boxes at the newspaper.

California is among the 10 worst states in the United States for taxes, which include the corporate income tax, the individual income tax, and the sales tax. Several states do without one or more of those major taxes, according to the Tax Foundation.

The Golden State ranked 50th in individual income tax, 40th in sales tax, 35th in corporate taxes, and 13th in both property and unemployment insurance taxes for an overall rank of 48th.

The five worst states in order are New Jersey, New York, California, Minnesota and Vermont.

The five best states in order are Wyoming, South Dakota, Alaska, Florida and Nevada.

Of course, companies factor in taxes when they're considering a move or expansion. Economic Development Corp. of Shasta County President Mark Lascelles will tell you that selling Redding to companies can be tough given we're in California.

"It's a huge challenge for companies outside of California," Lascelles told me the day I reported his plans to retire as EDC president next year. "They honestly don't want to be in California unless they have to be. Fortunately, the markets are big enough in California that we can use that as a hook to get them to talk to us."

Think Southern Aluminum Finishing and Captive-Aire, two East Coast-based firms that picked Redding to site their West Coast operations.

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