Sacramento County median home price down 53.5 percent from 2005 high

Last month, Sacramento County marked the fourth anniversary of its housing boom high with a median sales price of $180,000 – a whopping 53.5 percent less than in August 2005, property researcher MDA DataQuick said Thursday.

The county's August sales tally of 2,061 new and existing homes likewise fell well short of 3,800 in August 2005.

Now, four years later, these DataQuick numbers reveal the long, hard fall taken by the capital region, a descent defined by billions of dollars in lost home equity, more than 42,000 foreclosures and a marked slowdown in home sales.

A reversal of fortune that began in Sacramento County during the late summer of 2005, then quickly spread to seven other area counties, made Sacramento one of the first big U.S. housing markets to spin out of control. The aftermath still plays out in 2009.

"Everybody says buy a house. It's the best investment of your life," said Scott Seacrist, 30, who bought a small home in Sacramento's Elmhurst neighborhood in March 2006. "If I lived here 20 years, it would be the best investment."

Seacrist, like thousands of area buyers four years after the boom crested in Sacramento County, owns a home that's worth less than he paid.

"We love our house," said the married schoolteacher, noting that "it has a lot of charm." But a sustained housing downturn that came after moving in has provided its occasional bouts of anxiety.

No wonder, economists say.

"The bubble we saw was a once-in-a-century kind of event," said Dr. Sanjay Varshney, dean of the College of Business Administration at California State University, Sacramento. "You seldom see all the conditions in place simultaneously that allowed it."

DataQuick reported another month of uncertainty on the housing front. The researcher counted 3,375 closed escrows in August on new and existing homes in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. That was down sharply from 3,815 in July and marked a third straight month of lower sales than the same time last year.

There were 3,998 closed escrows in August 2008, DataQuick reported.

The firm noted that sales similarly fell from July in the Bay Area and Southern California. Its analysts attributed the drop to "a thinning inventory of foreclosure properties and financial uncertainty among potential homebuyers."

For months, first-time buyers in the capital region have expressed increasing frustration at being outbid on a dwindling supply of bank repos.

"In Sacramento County, foreclosure resales were 50.4 percent of sales in August," said DataQuick analyst Andrew LePage. "That's the lowest since 43.8 percent in December 2007."

Would-be buyers are nervous, too, about jobs as capital-area unemployment has reached 11.8 percent. LePage said, "It's not as if the job market is creating huge demand."

Four years ago, such a bleak scenario seemed improbable to experts at all levels. But it became real as median sales prices peaked at $387,000 in Sacramento County – after doubling in four years – and then rolled backward. The median, a point where half sell for more and half less, has fallen by more than 50 percent in Sacramento, Sutter, Yuba and Amador counties and more than 40 percent in El Dorado, Placer and Yolo counties.

The steepest peak-to-trough mark in Sacramento County came in February, when the median price fell to $160,000, down 58.6 percent.

The smallest decline is 35 percent in Nevada County, where there are fewer new homes and the "lowest percentage of bank-owned homes in the region," said Linda Kaneko, executive with Paul Law Realty in Grass Valley.

DataQuick records show 2005 highs of $501,000 in Nevada County and $474,000 in Yolo County. Yuba County reached $351,500, while Placer County touched a boom high of $525,000. Sutter County peaked at $339,000. El Dorado County's high was $531,250. Amador County crested at $425,000.


Source Sac Bee