So what were home prices like before this bubble happened (credit, brokers)

[Rob98LS1]

okay, but you can't deny the fact that home values have soared in this area because it has become such a desirable place, and not only due to the inflation. Placer county is the fastest growing county in CA, with sac county not far behind, as well as el dorado. A 20% change in population was recorded from 00-03 alone, that will tell you why prices have shot out of the roof. And the 150k homes was in the early 90's by the way for the one who asked.

[DMenscha]

Originally Posted by inpd

Sure. of course not, inflation is inflation.
But if the others posters are on the ball
then in not more than 10 years
Roseville went from $150K -> $450K
Midtown $250K->$800K
and Lands Park $150K->$600K

Then that's much higher than inflation!

But when did it really start ramping up
closer to 95 or 2000?

Right around 2000.

Real estate prices are demand driven. Sac got a big boost from people leaving the bay area. Actually I think anyplace within a two hour drive of the bay area got a big boost in demand. There was enough latent demand in the bay area to keep prices firm there, while providing a reason for a lot of people to migrate outward. Las Vegas is another place where demand outstripped supply for a good period of time.

I think inflation is not the main reason for housing prices. Until we get something like zero population growth, we're always going to have "inflation" in real estate prices. Demand outstripping supply. Combined with the fact that it has become VERY VERY expensive and time consuming to subdivide land, the supply of lots available for building isn't going to keep up with the demographics. I also think that the entitlement process (which is a big factor in how expensive a building lot is) is part of what keeps home prices higher than they should be. It takes almost 3 years for a builder to buy, subdivide, and start construction on the first home in a tract. Scary when you think about it from a business risk model. Imagine laying out tons of money for a product that wont get to the market for 3 years.

You can go to zillow.com and pick an address out and look at the 10 year trend line to get a better idea of how prices have performed over time.

You always start the most interesting threads

[inpd]

Originally Posted by DMenscha

You always start the most interesting threads

Thanks, I try . Your points are well taken, I'm
trying to get a handle on how over-priced Sac is
so I don't get burnt badly.

I was tracking two very nice homes in the Pocket
district and was going to try to get one and
both dropped their prices by $30K and $40K
respectively which prompted my question.

They had already dropped their prices by $60K
so I thought I was getting a bargain!

[renngrrl]

"Blessed are the knife catchers because they will inherit a mortgage for larger then me".

[GLS]

Originally Posted by renngrrl

"Blessed are the knife catchers because they will inherit a mortgage for larger then me".

"Blessed are my financial pot-holders. The turkey is ready to eat and I didn't get burned".

[inpd]

Originally Posted by GLS

"Blessed are my financial pot-holders. The turkey is ready to eat and I didn't get burned".

Blessed are the witty who make comments no one else can
understand and therefore think they are sophisticated.

[GLS]

Originally Posted by inpd

Blessed are the witty who make comments no one else can
understand and therefore think they are sophisticated.

Sorry, I don't understand your so fist tick cate it comment.

PS You don't have to worry about "catching knives" if you consistently employed a sound personal fiscal policy coupled with a long term strategy. More on....

[Ariel3574]

I have lived in sac since 1991. As I recall, the housing market started climbing in 2001. After the last rise & fall of the early 90s, median price in Sac had been stagnant at $135k. I was looking to buy a, new place in march 2001, 3bd 2 bath 1500sf for $135k, by september the same place was $173K. I figured that the market had topped out & decided to wait. Big mistake! The market almost tripled in a 5 year period, maxed at a median just below $400k. My friend bought a place in pocket area in 1998 for $140k & it went up to $485K or so she claims. I have no idea about the downtown area, but I remember a friend telling me the fab 40s cost a quarter of a million & I thought that was outrageous at the time...$250k!! lol

[Ariel3574]

I hate to admit this, but I bought a house in 1995 for 98k and sold it end of 2001 for 165k. Same house sold in 2003 for 265k. I was afraid to see what it topped out at in 2005. The prices shot up here because of the bay area influx, low interest rates & creative financing. The fact remains that incomes have not increased that much over the same period & now that people will need to qualifiy for real loans...the prices will drop until the median price is back in alignment with the median income. Actually, I predict an over correction due to the huge inventory & all the forclosures due to happen this year & tighter qualifications on loans. I am waiting but watching the market closely.

[Fat Freddy]

Demand, easy credit, and greed driven speculation all are factors in a real estate Bubble. But the main cause is conspiracy and price fixing in the local real estate industry.