Regional Spotlight: Once Housing Turns, Recovery Could be Fast in Sacramento

RISMEDIA, Oct. 30, 2007-(MCT)-We know. We know. The real estate news these days is always about home sales hitting a new low and values falling. As 2007 nears an end, everyone who owns a house is longing for something better — a recovery or at least some stability for the Sacramento region. Most local experts counsel it’s still a little early to be talking about either.

But for the sake of all anxious homeowners standing around the wishing well, let’s look at local history. If it has anything to tell us, it’s that real estate recoveries — and that dependable upward trajectory for California home values over the long run — usually come pretty fast once they start.

Consider 1997 across much of the Sacramento region. After several lean years of recession, job losses and military base closings, homeowners in El Dorado, Placer, Sacramento and Yolo counties saw their values start to climb again.

Here’s a look at September median sales prices for new and existing homes combined in the region after recovery began and until the next boom took off. Median is where half the homes sold for more and half sold for less. The statistics are from La Jolla-based DataQuick Information Systems.

–El Dorado County: A $160,000 median price in September 1997 climbed to $163,000 by 1999 and to $185,000 in 2000. It reached $245,000 in September 2001 before soaring out of sight. The September 2007 median: $415,000.

–Placer County: The September 1997 median was $167,000. It climbed to $211,500 in 1999 and then to $245,000 the following September. It reached $270,000 in September 2001. The September 2007 median: $415,000.

–Sacramento County: September 1997 delivered a $119,000 median price — still below the $138,000 median from September 1991. But the median climbed to $140,000 in 1999 and $154,000 in 2000. In September 2001 it hit $180,000 and then soared away. The September 2007 median: $307,000.

–Yolo County: Prices were $145,000 in September 1997 and climbed to $174,000 in September 1999. Prices dipped slightly to $165,000 in September 2000 before running up again to $199,000 in September 2001. The boom carried them up from there. The September 2007 median: $380,500.

No one predicts the capital region will ever see another boom in values like 2001-2005. But as this slump goes on and on, it helps the nerves to understand that the economy — and real estate — is a cycle of ups and downs. There are many who say the excesses of rising prices and easy lending standards make these uncharted waters. But if history is a guide, say the experts, this, too, will pass.

A ride on the Repo tour

Big-time sales creativity in the Central Valley starts at the San Joaquin County line and goes south. Check this out: Saturday foreclosure tours in Stockton, the nation’s foreclosure capital. It’s called Repo Home Tours. Real estate agent and loan officer Cesar Dias loads up a bus on weekends and drives the masses on a dozen-house tour. A tip of Home Front’s hat to the Stockton Record, which reports a few sales already for local fixer- uppers under $200,000.

A home away from home

South on Highway 99 we also have the home builder incentive of the week: You’ve heard of free pools and big-screen TVs. Here’s Danville-based Pacific Union Homes stepping out for buyers in its San Joaquin Valley markets of Oakdale, Atwater, Tulare and Porterville. This weekend it’s giving home buyers one week every year in a Florida, Hawaii, Las Vegas or Mexican timeshare — for the rest of their lives.

Says a Walnut Creek publicity firm pushing the promotion: “The builder is hoping the allure of a vacation getaway for life will be enough to loosen home buyers still super-glued to their seats on the home-buying fence.”

A dip in mortgage rates

Finally, when bad news is also good news: Market concerns about slower economic growth in the next few months pushed interest rates lower this week, to 6.33% for a 30-year fixed rate loan. That’s down from 6.4% last week, reported mortgage giant Freddie Mac. This week’s rates are the lowest since the week of Sept. 13, and they’re edging back toward lows from last May, according to Freddie Mac.