'At the Moment, Nothing Will Pencil' "Despite a Mountain of Recent Hype"

From the Sacramento Bee:

...Sacramento's central city housing effort -- despite a mountain of recent hype -- took so long to germinate that downtown largely sat out one of the hottest housing markets in memory. With the real estate industry in a slump, it's unclear whether some of the ambitious projects conceived at the tail end of the housing boom will materialize. "In Sacramento, we didn't capitalize on a great market cycle," said Sotiris Kolokotronis....

The local urban market was just starting to take off when the nationwide housing downturn began. Now, developers say, sales prices have stagnated while the cost of steel, concrete and other materials continues to rise -- making it more difficult to finance already tight deals.

"Market conditions have deteriorated rapidly," said developer Mark Friedman, whose Loftworks group developed successful loft housing, office and retail projects at 16th and J streets. But the firm recently walked away from a 16th Street project it was working on with the Capitol Area Development Authority. "At the moment, nothing will pencil."
...
Friedman said he also has put on hold his plan to build about 2,000 housing units just across the river from downtown on the West Sacramento waterfront.
...
Unlike Saca and Nassi, some other developers who started planning downtown projects while the market was hot have backed out or said they're waiting to see where prices go before breaking ground.

Citing the nationwide market downturn, D.R. Horton, one of the nation's largest home builders, recently pulled out of two high-rise condo projects planned for downtown Sacramento....

Meanwhile, the Sacramento suburbs still offer so much more square footage for the money that people who might otherwise choose to live downtown don't. "We've basically got unlimited land for suburban development, which detracts from the downtown," said John Frisch, local head of real estate brokerage Cornish & Carey Commercial.