California's New Canary in the Coal Mine

San Diego gets all the attention. It is often cited as the national housing market's "canary in the coal mine." But does it still deserve that title? Well folks, it's time for Round 3 of the California Canary Showdown (Round 1, Round 2) and it looks like we have a new champ!

First up, is a comparison of median price appreciation/depreciation rates for resale single family residences and condos as well as new homes in San Diego and Sacramento counties. (Data Source: DataQuick's dqnews)



Winner: Sacramento

Now let's look at another data source and push back the time frame to 2004. This next graph compares median price appreciation/depreciation rates for resale homes only in the San Diego and Sacramento regions. (Data Source: California Association of Realtors, car.org)



Looks like San Diego peaked earlier, but Sacramento has now caught up and ekes out a small victory.

Winner: Sacramento

We might have a knock out punch in this next graph. Here's a look at sales volume change of resale homes for the two regions. (Data Source: California Association of Realtors, car.org)



Winner: Sacramento

Meet the new canary in the California coal mine: Sacramento.

"The biggest slowdown is the one getting the least attention -- the one in my own back yard (the Sacramento area). The Bay Area influx into Sacramento has waned here and a lot of investor-speculator types have run off to Texas, Idaho and other areas out of state. The Sacramento market is relying on local buyers more so than in many years. The result last month was the median sale price for all homes fell 5 percent from a year ago -- the biggest drop among major counties statewide. Sizeable builder incentives and some outright builder price reductions have been the norm here this year."

~DataQuick's Andrew LePage, August 25, 2006.