Sign in Subscribe
Real estate industry

Sacramento's Housing Market Shows Signs of Recovery

Strategic Insights

— 2 min read

As one of the first cities to be hit hard by the real estate collapse, Sacramento's housing market is now showing tentative signs of recovery. With sales up 45% from last year and the backlog of inventory diminishing, indications of progress are evident in other hard-hit areas such as Las Vegas, parts of Florida, and the Inland Empire in southeastern California. While it's fragile and could easily be fleeting, the city's economy, still reeling from the effects of the housing bubble burst, is finally showing some positive signs.

Key Takeaways:

  • Sales in Sacramento have increased by 45% from last year, with the vast backlog of inventory diminishing.
  • The percentage of first-time buyers in the market has risen to 53%, even before the introduction of the first-time buyer's tax credit of $8,000.
  • Two-thirds of existing single-family houses and condominiums sold in March were bank repossessions, up from 8.5% two years ago.
  • New construction is nearly nonexistent, with sales driven by foreclosed properties.
  • The Whitman couple, who bought a three-bedroom foreclosure for $224,500, think they got a good deal, with their monthly payment, including property taxes, standing at about $1,200.
  • At the current rate of sales, there is less than three months of inventory in the Sacramento market, a sign of a potential seller's market.
  • Banks have lifted moratoriums that lowered foreclosures last fall, resulting in a record 2,819 default notices filed in Sacramento County in March.
  • Analysts predict further price declines and slowing sales, but some argue that such bleakness from those whose livelihood is selling houses is a positive sign.

Statistics:

  • Sales in Sacramento have increased by 45% from last year.
  • Existing home sales in March were down 7% from last year in the United States, but up 1% for those pending deals now under contract.
  • The number of houses under contract in March was up 1% from a year earlier.
  • The supply of unsold homes was about 10 months in the United States.
  • Two-thirds of existing single-family houses and condominiums sold in March were bank repossessions.
  • The unemployment rate in Sacramento County is 11.3%, the highest in decades.
  • The percentage of first-time buyers in the market has risen to 53%.
  • The first-time buyer's tax credit of $8,000 became available.
  • Interest rates have fallen, enabling buyers to increase their price limit.
  • The Whitman couple's monthly payment, including property taxes, stands at about $1,200.

Sources:

  • The New York Times
  • MDA DataQuick
  • National Association of Realtors
  • Fitch Ratings
  • First American CoreLogic
  • PMI (Private Mortgage Insurance)

Read more