Sacramento, Calif.-Area Home Prices Climbed to Record Highs in 2000
Jan 01, 2001 (The Sacramento Bee - Knight Ridder/Tribune Business News via
COMTEX) -- Home prices and sales climbed to record highs in much of the capital
region in 2000 thanks to a big push from out-of-town buyers, modest mortgage
rates and a booming local economy that created plentiful jobs and strong
consumer confidence.
Many local experts anticipate healthy but less spectacular results in the new
year. That's chiefly because they expect local job growth, which creates much of
the demand for housing here, to decelerate as the U.S. economy weakens.
The median price of an existing home in Sacramento County hit a record $147,000
in October, up 15 percent over a year ago, according to the most recent figures
from Dataquick Information Systems, which tracks escrow closings.
The median sale price for the entire January through November of 2000 was
$151,500, up 10.2 percent from the same period in 1999.
In Sacramento County's new-home market, where Bay Area buyers are increasingly
common, the median sale price soared to a record $221,500 in November, up 18
percent from a year ago.
Experts say the relatively puny supply of homes on the market -- a problem for
buyers but an advantage for sellers throughout the year -- helped push prices to
record levels in many areas.
In Placer County, the monthly median sale price for resale homes peaked at a
record $230,000 in November, up nearly 17 percent over last year. For the first
11 months of the year, the median -- where half of the homes sold for more and
half for less -- was $235,000, up 16.3 percent.
In Yolo County, the median sale price topped out at $192,000 in July, up 14
percent, Dataquick said. For the 11-month period the median was $175,000, up 6.1
percent over the same period in 1999.
El Dorado County statistics have been delayed for months because of technical
problems in the county assessor's office. Through August the high median sale
price for the year was $190,000 in June, up nearly 20 percent from June 1999,
Dataquick said. The median for the entire period between January and August was
$183,000, up nearly 11 percent from 1999.
This year's price increases come as stellar news for many capital region
property owners, who watched the value of their homes plummet 30 percent or more
during the recession of the early and mid-1990s.
On the other hand, steep appreciation last year also meant that many first-time
buyers were priced out of their favorite neighborhoods, where homes under
$150,000 became scarce. And in the new home market, it's getting increasingly
difficult to find anything here priced at less than $160,000.
Local housing analysts say that despite the stock market's recent tumbling,
waning consumer confidence nationally and predictions of a possible U.S.
recession in 2001, they have yet to see signs of weakness in the local housing
market.
However, the sales statistics are for closed escrows; so the most recent sales
data, from November, reflects buying decisions people made back in September and
October, before the economic news turned particularly sour.
Most local analysts expect more modest price appreciation this year, largely
because the local job market is expected to throttle back.
Preliminary state estimates show the capital region, which created close to
40,000 new jobs in 1999, generated roughly 25,000 last year2000.
Given the slowing U.S. economy, and possibly much higher energy costs in
California for months to come, some analysts aren't expecting job growth here in
2001 to match the levels attained in 2000.
Ted Gibson, the Sacramento-based chief economist for the state Department of
Finance, predicts that even if the U.S. economy slows significantly in the new
year the local housing market will remain relatively strong.
Gibson says that's largely because of the relative affordability of this region,
making it attractive to buyers and employers from the Bay Area and beyond.
Coupled with an overall healthy job market and low home loan rates, he sees
continued pressure on housing here.
He adds, however, that "with a little less ebullient economy and stock market
(next year) I'd look for a somewhat less ebullient market for existing homes,
although I think new construction will really benefit from the lower interest
rates."
Rates for a fixed 30-year mortgage have been plunging toward 7.0 percent for
months, after peaking this year at nearly 8.7 percent in mid May.
Meanwhile, there appears to be one segment of the tight local housing scene
where true bargains can still be found. But you'll need to pay at least
$500,000.
In Sacramento, Placer and El Dorado counties combined the inventory of
$500,000-plus homes exceeds 6 months, creating a buyers' market, according to
Michael Lyon, whose Trendgraphix real estate information company uses county
Association of Realtors statistics.
For all price points combined, the firm reports, there is only about 1.5 months
worth of inventory, creating a seller's market. Theoretically, that's how long
it would take to sell all of the homes on the market at November's sales pace.
In November there were 385 homes in the three-county region priced over $500,000
and 57 sold -- up from 23 sales, or 150 percent, from the same month last year.
But that increase isn't so impressive, Lyon said, in light of the hefty
inventory of $500,000-plus homes for sale.
Lyon, who is also president of Lyon & Associate Realtors, said demand is soft
for upper-end homes simply because the capital region hasn't generated enough
high-paying jobs to create heavy demand for them.
By Andrew LePage
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