The Housing Chronicles Blog: The return of the $200,000 house in Sacramento

Friday, January 18, 2008

The return of the $200,000 house in Sacramento

Sacramento was definitely one of those places in which a $400,000 home in the suburbs seemed somewhat out of whack, so the return of a $200,000 home should help re-ignite sales in one of California's most troubled metro regions.

Writing in today's Sacramento Bee, Jim Wasserman tells us that median prices are down by 20% from a year ago, giving up the gains of the last four years:

Statistics released Thursday showed that median sales prices declined 20 percent during the year in Sacramento County for new and existing homes combined. Property researcher DataQuick Information Systems Inc. declared it the steepest fall for a large urban county in California.

The county's median sales prices are now at levels of four years ago. Only three other counties came close: Riverside County was down 18 percent during 2007, San Bernardino County prices fell 15 percent, and Solano County was down 16 percent...

DataQuick statistics show sales prices are continuing to fall throughout most of the region as banks are gaining on home builders and individual sellers as the primary driver of sales.

This isn't surprising considering that more than 70% of current listings in the area are foreclosures and that 38% of December's sales were REOs, and many expect 2008 to be the year that banks get even more aggressive to get these properties off their books:

"What you're starting to see right now with the foreclosure inventory swelling is the banks are getting aggressive," said Lincoln-based real estate agent Mike Toste. "They're the ones wheeling. If all their competition is bank-owned and they drop prices 30 to 40 percent, then they've got to do the same thing. If they can't sell within 60 to 90 days, they're getting extremely hungry. I think 2008 is going to be a year to remember."

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