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The Sacramento Area Housing Market: Did we just push off the bottom?

  Smith, McDowell & Powell   May 25, 2012   Blog   Comments Off on The Sacramento Area Housing Market: Did we just push off the bottom?

Gone are the days where homeowners viewed their residence than any more than just that – a place to live.  We no longer see our homes as an investment or an ATM machine.  If we are lucky, our houses are a roof over our heads to raise our kids.  You no longer hear people saying  “wait until the market comes back…” and there is good reason for that – it has come back, come back down to earth.  The bubble realized from 2003-2007 was the anomaly and we have been suffering through the correction.  Values have seemed to fall longer than they rose, but at some point the market will bottom out, and homes will appreciate at a more conventional, historically sound rate.

The housing market in many regions has already begun to turn around as early as 2 years ago.  But for the Sacramento region, this month, May of 2012, roughly 5 years after the downward turn began, we may have seen the first signs of normalcy.

Albeit good news, it is by no means definitive.  This potential recovery is dependent upon the very factors that have been contributing to the downturn – bank foreclosures and owner short sales.  But a rise in prices has an effect on both.  Owners will have to think twice before short selling a home – they could be leaving money on the table.  Given the usually lengthy amount of time for a bank to approve a short sale, a home’s value may fluctuate during that period.  Does the short seller want to abandon value?  Will a bank prefer foreclosure to capture the new found equity?

As is standard in this economy, even the most minor shifts ask more questions than they answer.

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