Wednesday, August 30, 2006

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,

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,

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.


Bakersfield Bubble said...

The rest of the valley will soon follow Sac's lead. Fresno and Bakersfield are next, unfortunately I think we will ending being much worse.


David said...

Nice comparison! How about Sacramento vs. Phoenix?

I am very impressed with your blog.

Bubble Meter Blog

Anonymous said...

I think I hear a bird choking. Oops! Those choking sounds are all the lemmings who got roped into the "you can pay me later" scheme. Time to dump the albatross before they repo the Hummer. Those granite countertops and bamboo hardwood floors shouldn't be a problem because you don't have to pay interest until 2009 (albeit you paid a hefty premium to get the deal)...unless of course you financed it with your equity line of credit. Wait, what do you mean they won't appraise your home at a value you can refinance? You're already working two jobs just to make the new payment on your loan. What are your options? What will you do? Yup, those choking sounds are getting louder by the week.

jetavana said...

This is the link for Countrywide REO,

At the beginning of the year, no more than 50 listings in CA. More than 100 now. Look for Sacramento and San Diego.

sf jack said...

Great work on this comparison!

It looks like it has been quite a race - now it's a race to the bottom.

Congrats to Sacramento!

[though maybe instead congrats should be offered to the Bay Area equity nomads who enabled it all...]

Anonymous said...

Shouldn't the capital be considered the defending champ? GO - Sacramento. Keep the prices falling, and flippers crapping in their now scared pants.

Anonymous said...

I have an idea. I will pay for the Hummer, and you throw the house in for free.

doug_rwc said...

jetavana - thanks for the posting the countrywide web address. Anyone else know who is going to get stuck holding a lot of properties? Or the website address for their reo's?

Conventional and conforming loans are usually bundled and sold in the secondary market. But what about unconventionals (interest only, neg am, arms, etc)?

synthetik said...

Great graphs, however wouldn't San Diego still be the CITCM because it was first to peak, and therefore alert the rest of the nation to the crash?

Athena said...

holy cow! those are some scary graphs!

Wonder how long it will take for the mainstream media to catch on... maybe we should have a graph for how long it takes before news actually makes the news. :-/

Great work Lander!

Anonymous said...


Which HOOD is going to get wacked the hardest?

My bet - Elk Grove, the city of developer controlled lenders that lent to people that were not financially qualified to purchase $400,000 to $600,000 SFR's.

Get this.....

The city has one house for sale per 70 residents (130,000 / 1,800)

or roughly

ONE in TWENTY Households (assume 3 people per household) want to sell!


Why are there so many Elk Grove pot houses?

Stupid flippers

Igonorant landlords that rent to any tom dick or harry that shows up with a checkbook in hand.

At least they are not meth houses that can explode if cooking goes awry.