NAR: Sacramento is the Biggest Loser

From Bloomberg:

The median price for a single-family home in the U.S. dropped 7.7 percent in the first quarter, the biggest decline in at least 29 years, as values tumbled in two-thirds of U.S. cities, the National Association of Realtors said...The biggest declines were in Sacramento, the capital of California, which had a 29 percent drop, followed by the metropolitan area around Riverside and San Bernardino, with a decline of 28 percent.

From the NAR's October 2005 Sacramento "Anti-Bubble Report" (shockingly, the report is no longer available on nar.org!):

With home prices rising strongly in most parts of the country, there has been widespread media coverage on the possibility of a housing market bust. A thorough analysis of the Sacramento-Arden-Arcade-Roseville metro market, as detailed below, reveals that there is little danger of this. In fact, the local housing market is in excellent shape with a potential for significant housing equity gains, particularly for homebuyers who plan to remain in their house for the long run...Housing equity will most likely continue to accumulate to local homeowners.
...
Price declines in the local market are unlikely according to our stress test. The local housing market will experience a price decline of 5% only under extreme unlikely scenarios. For example, mortgage rates rising to 7.8% in combination with 25,000 job losses could lead to a price decline.
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Home price declines are very rare. In fact, the national median home price has not declined since the Great Depression of the 1930s...There have been few times when local prices declined. In nearly all these cases, the price declines were accompanied by sharp prolonged job losses. It is difficult to foresee a price decline in a job creating economy.

So will the NAR be wrong twice? Can Sacramento home prices bounce back in the face of a recession?

From the CVBT:

More than 1,000 homes per day were sold in foreclosure auctions in California last month, according to ForeclosureRadar Inc....Sacramento County had 1,653 homes auctioned in April. That is one sale for every 838 residents, sixth highest in California. The number is 217 percent higher than April 2007.

From the Wall Street Journal:

Here's another consequence of the troubled housing market: Some homeowners associations are running low on cash.
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One estimate puts the delinquency rate on dues at less than 5% in many markets -- higher than normal, though still not enough to threaten basic services....Elsewhere, the rate is much higher. At Spanos Park East in Stockton, Calif., owners of about 25% of the development's 1,500 single-family homes have been delinquent in paying their quarterly dues, according to Adrianne Bretao, a manager at M&C Associations Management Services, which helps to manage the community association. As a result, the association has put off expanding a patio area in the clubhouse and swimming pool this year, says Denise Laven, the association's president.

"It's frustrating," Mrs. Laven says. "We're seeing the people not paying the fees, so we know it's our money that has to pay for everything. And our dues will go up next year because we set them annually."