Tuesday, July 18, 2006

Ding Dong - YOY Price Declines Arrive in Sacramento


It's official. For the first time since 1997, median sales prices for homes in Sacramento County declined on a yearly basis, according to the Sacramento Bee.

After five years of fast-rising home prices in the capital region, an increasingly entrenched slowdown in sales and a pileup of resale inventory is taking its toll. For the first time since the late 1990s, median sales prices for homes in Sacramento and Placer counties have slid into negative territory compared with the previous year...The milestone development in three of the region's counties marks the capital area and San Diego County as California's first major metropolitan markets with year-to-year price declines.

Sacramento County, as the region's biggest real estate market, saw collective median sales prices of new homes, condominiums and existing homes dip to $368,000 in June -- down 1.3 percent from $373,000 in June 2005. That was the first year-to-year decline since October 1997, according to DataQuick. Placer County registered a June median sales price of $452,000, down 6.2 percent from $482,000 in June 2005. The county's last year-to-year price decline was in January 1998...

Analysts said the new figures represent the latest fallout from months of rising interest rates, prices that surpassed area income levels and a fleeing of the market by speculators. It clearly marks the end of a sizzling market in which Sacramento County alone saw 66 straight months of double-digit price increases over the previous year.
Expect a more detailed article to appear in tomorrow's newspaper.

11 comments:

Lander said...

Thank you Gwynster for spotting this milestone.

Garth Farkley said...

Duh.

Lander said...

Updated article here.

This line deserves a prize:

"To compare this year to last year or the last two years, they're just kind of two different markets," he said.

Anonymous said...

maybe david lereah could do some book signings at the local barnes and noble stores,turn this market around.

Anonymous said...

This continues where an earlier post, "California Canary Showdown: It's a Tie" left off. The median home price momentum is clearly in a downward direction. How far will things go? Any predictions?

Anonymous said...

what are you talking about divotmaker! there's no precedent for that. you'd need mass unemployment and runaway inflation if you want that ... in which case we won't be celebrating the pullback in prices.

Anonymous said...

$150 sq/ft is not that far off.

we've been looking to purchase in whitney ranch and the larger homes are between $160 - $175 sq/ft. this is after the incentives are included.

thanks for the great info on this blog. we've been looking in the area for a while and saw the prices drop dramatically.

so we decided to rent to see if it cools down further.

Anonymous said...

I don't think 30% is an out of line assessment. True, I personally wouldn't mind seeing it, but when we've seen well over 200% growth overall in this area throughout the last 5 years, what makes you think a 30% drop is out of line?

It's pretty easy to know that a whole lot of people are in for a whole lot of hurt as ARMs continue to adjust. Aside from that though, the economic side of things could indeed feel an impact since these personal wealth losses will likely result in a large drop in consumer spending. As far as jobs go, don't forget that ~50% of new jobs in CA over the last few years have been tied to the housing/lending/RE industries. These areas are all in for some hits.

So yeah, I think 30% is a reasonable guess.

Anonymous said...

I think you mean the overall inventory went up by 269 units, but yes, it did.

Overall, in the past 2 months, inventory has risen about 50%. That's amazing.

Anonymous said...

We are moving from Atlanta and wondering ... buy or rent a year?

Anonymous said...

The record high inventory to population for Sac was in 1992. Wasn't this 3 years after the peak and about 4 years before prices started rising again. It seems to me we have a lot more inventory left to increase and much much further for prices to fall.