Tuesday, September 19, 2006

Sacramento Leapfrogs to #2 Spot on PMI's Risk Index

In June, Sacramento was ranked #5 (out of 50 major metros) on PMI's Market Risk Index. That was the first time Sacramento had landed on the top 5 list. Now, in the latest PMI Risk Index, the Sacramento housing market jumps to second place behind San Diego:

Fall 2006 PMI U.S. Market Risk Index

San Diego-Carlsbad-San Marcos, CA 603
Sacramento-Arden-Arcade-Roseville, CA 601
Oakland-Fremont-Hayward, CA 600
Santa Ana-Anaheim-Irvine, CA 599
Nassau-Suffolk, NY 598
According to the report (pdf), the Sacramento housing market is cooling at the quickest rate in the nation.
Last quarter, 34 MSAs experienced deceleration, and this time a year ago only seven MSAs saw the rate of appreciation slow. The five areas with the highest rates of deceleration were all in the West. Sacramento led the trend with a 17 percentage point drop in year-over-year appreciation, to 6.3 percent compared to 23.31 percent a year earlier...
Next up: #1?


hemorrhoidforhousing said...

All those excited buyers who bought dumps thinking somebody else would pay more for them are finding out it isn't so.

Everybody is being reminded houses are consumable assets requiring cash to operate and maintain.

Once this reality set in, the speculators headed out and the true demand returned. Now there is a glut of available homes on the market and it is going to take a price reduction of about 20% to get the market back on track

Happy Renter said...

Great reporting Lander!
Dqnews should update anytime now.
Any predictions?

Happy Renter said...

Has anyone been able to get on Ben Jones blog today?

David said...

no. In the meantime there is are the other housing bubble blogs. The bubblesphere has its addicts.

chuck said...

what? what does this mean?

Will Saca still give me an interest only no down payment loan on my new 28th floor condo? I do not currently have a job, but am expecting one any day soon because the DMV said I could be a license plate checker!

I'm already prequalified for my loan out at Anatolia (we liked the Hermes three bedroom, 2-1/2 bath model with "House of Ataturk" and "Troy" upgrades)! But I was sure I could switch over to the high-rise condo!

I am sure now that we are much higher on this index, everything will go much smoother for our new condo and good loan.

Ali, in Cali said...

Oh, good. I thought my computer was malfunctioning when Ben's page refused to load.

Anonymous said...

But bottom line: appreciation still positive. Everyone overlooks this simple fact.

Anonymous said...

Last I checked YOY for Sacramento was -5%. Check out flippersintrouble.blogspot.com if you think there appreciation still exists in the Sacramento area.

Anonymous said...

"But bottom line: appreciation still positive. Everyone overlooks this simple fact."

The simple fact is that the median price when "n" is small, is not reliable data in gauging the housing market. My take is that the higher priced homes ie $600K+ are selling slightly better because their prices are falling more drastically. This combined with "n" getting smaller, will give a skewed median number. So if the median is going up, why aren't people selling their homes? hmmm... appreciation still positive? Try telling the sellers who are cutting their ask 5% weekly that it's appreciating and they'll give you a fresh one!

Gwynster said...

Prices are definatly down in Davis.
People are reducing prices, taking low ball offers or just serial relisting.

I'm really looking forward to next spring.

pismobear said...

I can't get into Ben's joint as well. Explain to me why housing is going up! OK : If they said it was going to go down 15% and it went down only 10%, that means that it went up 5%. Understand David and Leslie? Of course, brilliant, Pismobear! hehehehehehehehehehehehe

pismobear said...

I think someone 'Hacked' into Ben's blog. We must be getting to 'them'.

Ali, in Cali said...

"The simple fact is that the median price {...} is not reliable data in gauging the housing market"

And I just discovered this explanation today. Might as well share the new knowledge I gained with all of you.

Ali, in Cali said...

Oops. I actually meant for you to check out this one, but I got a little ahead of myself. Whatever; they are both worth the read.

Happy Renter said...

Are you the same one that dropped out a year and a half ago? Crowded on these blogs isn't it.

Rob Dawg said...

Not so fast. #2 only on the shortened list. The appendix show you have company:

Oxnard-Thousand Oaks-Ventura, CA 601

Not thay it matters, both places have a 100% chance of a decline. PMI says the number is only a likelyhood of decline but it looks more like a potential amount of decline. Heck, a 60.1% decline in either area would "crash" prices to levels not seen for... well, not seen in nearly 4 years.

David Ashley Gilbert said...
This comment has been removed by a blog administrator.
Lander said...

Robert-Sticking up for the hometown?

You are right. I should have said #2 among the "nation's 50 largest metropolitan statistical areas." The appendix link is here.

At quick glance, these smaller markets have higher scores than Sacramento:
-Barnstable Town, MA
-Salinas, CA
-Santa Barbara, CA

Anonymous said...

FYI, Ben Jones is having to move his blog since it's getting too popular, it should be up again soon. THis is a post from another of his blogs:

BTW, readers of my housing blog may note that the site is down. I am having to move it, again, due to traffic issues. It should be completed within 24 hours.

Anonymous said...

Try a 30% reduction in price.

What was the house worth in 2002?

That is what it is worth now.

Income levels haven't gone up.

Very few new high paying jobs.

Higher interest rates than in 2002.

Stricter lenders.

Did you hear the POP?

Anonymous said...

Tell these real estate Anal-Ists that Median prices don't mean jack!

All you have to do is look at sales price per square foot to develop a trend line.

What is the problem with the dumbbells in the real estate journalism field?

This ain't rocket science that we are talking about.

There is going to be alot of fraud investigating to do when this market tanks.

Mortgage Pimps beating up on appraisers to get pumped values.

Appraisers submitting to the pimps.

Let's hope China doesn't declare war on the U.S. when a huge amount of their tranches (blocks of collateralized mortgage obligations) have their value go up in smoke.

Hope CalPERS didn't sniff too much of the mortgage cocaine or the state taxpayers are going to be in a world of hurt.