Monday, December 04, 2006

Sacramento Housing Market Price Appreciation: 242 Out of 275

Last week, we again had confirmation that the Sacramento housing market is one of the weakest real estate markets in the country. In their House Price Index (HPI) report [pdf], the Office of Federal Housing Enterprise Oversight (OFHEO) ranked the Sacramento housing market 242 out of 275 for the rate of house price appreciation (1.37%). Just one year ago, the Sacramento real estate market ranked 41st in the country (out of 265), with a yearly appreciation rate of 19.42%. At this rate, Sacramento may soon land on OFHEO's bottom 20 list, joining the ailing markets of the rust belt.

On a quarterly basis, Sacramento's HPI declined for the third straight quarter, falling 0.89% from the second quarter. Next quarter, this lagging indicator should finally register a year-over-year price decline. Here's a look at Sacramento's HPI since 1977.

More HPI Graphs at Paper Money


Gwynster said...

Lander, did you see this piece on more lay-offs coming in the Sac area?

Anonymous said...

Anyone know a good place to find out about new developments, especially condos?

Anonymous said...

Yeah, Omaha.

Gwynster said...
This comment has been removed by the author.
Gwynster said...

Not much being built - builders are selling what they have and laying low from what I'd been able to see last weekend. But I was only looking in the Woodland/Davis/Natomas area.

After just one day of looking in Natomas, I've come to the conclusion that that place is toast. Natomas is now off my search - same with EG.

AnalysisGuy said...

I released three more Q3:2006 reports today - San Francisco, Seattle and Los Angeles. Seattle is particularly interesting because it's never had a period of nominal price decine. Thanks for posting a link to our page. We need to get the truth out! I will run a Sacramento Q3 report within weeks.

Gwynster said...

Cool beans Buster - thanks for the good work.

At some point I need to do some analysis on the Yolo market but it looks like the home builders are even starting to under price the crappy 70's properties in Woodland.

paranoid renter said...


There seem to be a lot of new single family homes being built - most of the big builders have some major project or the other going on - like the west park development in Roseville.

I'm interested in buying a condo when prices fall and I think it might be possible to negotiate a lower price, but I want to find something that I like. Most condos are 3 levels these days and I want to look for something that is only 2 levels. That's why I was looking for where to find information about new developments.

Definitely can't afford a single family home now and it's hard to say if prices will fall enough or not.

Sorry I put my first post as anonymous.


Gwynster said...

Well I have no insight into anything east of midtown since it's an area I'd never live in. It reminds me of the parts of OC that I didn't like when I was growing up there.

I did do a little snooping on CL tonight. Look under For Sale and search for "moving". Lots of listing say they are selling items like major appliances because they are moving out of state.

Anonymous said...

Hi Gwynster,

What do you mean when you say that Natomas and Elk Grove are "toast"? I rent in Elk Grove but I'm not looking to buy here, and I'm wondering if you've reached the same conclusions I have about Elk Grove.

Ironically enough, I'm considering West Roseville (it's close to my in-laws), but I'm wondering whether it's "toast," too.

Curious Anonymous

Anonymous said...

"...and I'm wondering if you've reached the same conclusions I have about Elk Grove."
-- What? That Elk Grove and South Sac are one in the same? The old adage "never live south of 50" still rings true!

drwende said...

Natomas, Elk Grove, and West Sacramento -- all falling butter-side-down on the rug.

Overbuilt + too many money-losing rentals + too many desperate flippers + too many throat-slashing homebuilders = plunging prices, neighborhoods with virtually no owner/occupants, and a shrinking tax base as owners petition their property taxes down to their new market values.

Instant slums...

Anonymous said...

But aren't the Fabulous Forties south of Highway 50?

Good point about Elk Grove. It does seem on the verge of becoming an extension of South Sac, if it hasn't already. And they're not done building yet -- Madeira, the newest development, is just starting to build.

So, how does one avoid "instant slums" when buying a new home? I personally believe in pulling county assessor's records to get a sense of the percentage of renters, but that's labor intensive.

And what do you make of West Roseville (WestPark, Crocker Park, etc?) Are these instant slums, too?

Curious Anonymous

The Slide Show said...

Well Yes, there are some FORTIES south of Hiway 50 BUT I don't consider those ones to be FABULOUS ! The Forties grid parameters are debatable but call it 37th street to 47th street and J street to Folsom Blvd. Of which I dumped my 1/2 interest in a 1575 Sqft brick Tudor 2 months ago, motivated by this Blog. I think the Fab 40s will weather decent while EG and Natomas sink...but 10 years of coming holding costs with no appreciation gives me the creeps. I sold out for 88 cents on the dollar and am not crying about it.