Elk Grove, Roseville Growth "Juggernaut" in Trouble

If market decline is a sickness, then strong population growth is the antidote, at least according to some real estate optimists. Here's the latest on how the housing "cure-all" is faring.

When the topic is the Sacramento region's growth, Elk Grove and Roseville inevitably come up. The area's two biggest suburbs have accounted for one-third of its population growth during the past five years.

But rising home prices and other factors have slowed the juggernaut. Roseville had its slowest rate of growth in 30 years during 2005, according to population estimates released Monday by the state Department of Finance...Roseville has seen its growth rate slip faster than just about any other city in the region. It grew by 1.4 percent in 2005, a rate of slow growth not seen in the city since the mid-1970s...Elk Grove grew 8 percent - substantial, but way below the almost 30 percent growth logged during 2003.

The two cities are the best local examples of a regional and statewide growth slowdown. Thirteen of the 18 cities in Sacramento, Yolo, Placer and El Dorado counties saw slower or no growth during 2005. While cautioning against confusing one year's worth of data with a trend, experts and city leaders blame high housing prices for much of the slowdown. They also talk about "build-out" - what happens when a city hits growth limits.

Overall, the four-county region grew 1.6 percent from Jan. 1, 2005, to Jan. 1, 2006, state figures show. It was the fourth consecutive year-to-year easing of the growth rate. The bottom line: People were coming here in droves when the area was seen as a bargain. Now that home prices have shot up dramatically, that influx of people has slowed, though not stopped.

Roseville residents are noticing the slowdown. Karen Olson and her family of four moved to Roseville from the Bay Area three years ago, when the city's growth was at its peak. "There was an incredible amount of growth," she said. "When we bought our house, we had to put in our bid and pray." Since then, however, she's seen that homes in her west Roseville neighborhood aren't selling as quickly. She blames the softening market on the rising cost of living and uncertain economic times...

As much as any place in the region, Elk Grove has been a victim of its success - high demand for homes in the area have pushed housing prices way up. More than a decade ago, some residents chose to live in Elk Grove in part because new homes tended to be less expensive than in Roseville or Folsom. But more recently, as home prices soared, it became difficult for first-time buyers to purchase any homes in the median price range - the point at which half the homes cost more and half cost less.