Bob Shallit 2009 Sacramento Economic Predictions (Granite Bay, El Dorado Hills: sales, foreclosures, to rent)

[NewToCA]

Sac Bee business writer Bob Shallit issued his annual economic and development predictions for our region today. He is a pretty good evaluator of the local economic climate, and to his credit he reviews his prior year predictions each year for accuracy. Among his predictions for this year:

Builders and buyers will continue struggling in 2009, but by midyear we see home prices bottoming out, foreclosures dropping and sales picking up, spurred by declining interest rates.

Don't expect any movement on the downtown railyard.

local grocers...won't face competition from Fresh & Easy, the British-owned chain which will again delay its move into Northern California.

Bob Shallit: 2009 won't be pretty, but not all ugly, either - Sacramento Business, Housing Market News | Sacramento Bee

[zen_klown]

This is a chart which shows how long it takes to sell the existing inventory of homes in a given neighborhood at the current rate of sales. That is what they mean by months of inventory. Up until now, homes in the high end have held up pretty well. But if you look at the zip codes were inventory is growing, its in the expensive neighborhoods, Granite Bay (95764), Arden Park (95864). My hunch is that the growth in inventory is going to keep downward pressure in those neighborhoods for the foreseeable future. But in the low end, I think price levels have pretty much bottomed out already. Because those properties are cheaper to own than to rent, investors are buying them up. Depending on what neighborhood you live in, I think the housing bust has probably bottomed out.

nov-dec2008monthsinv.GIF (image)

If you want to see where these zip codes are in map form use this here.

Click for a Zip Code Boundary Map.

[Elizabeth Weintraub]

Granite Bay has 48 months of inventory as compared to the rest of Sacramento which, in November, sat at 3 1/2 months.

[NewToCA]

Originally Posted by Elizabeth Weintraub

Granite Bay has 48 months of inventory as compared to the rest of Sacramento which, in November, sat at 3 1/2 months.

Why do you think the Granite Bay home prices haven't declined more, based on the inventory and lack of buyers who can now qualify for these homes?

[Elizabeth Weintraub]

The high median price last year in Granite Bay was a million in January and the median price dropped to $701K. Sales declined 57% over the past 15 months. The average price per square foot dropped from $317 in January to $200 by November. There are definitely bargains in Granite Bay right now. I misquoted the months of inventory though; it's 48 months for homes over a million and 31.7 months for all homes in Granite Bay.

We've got agents from that area coming down to work in my area -- the central city core -- because nothing is selling there.

[NewToCA]

Originally Posted by Elizabeth Weintraub

The high median price last year in Granite Bay was a million in January and the median price dropped to $701K. Sales declined 57% over the past 15 months. The average price per square foot dropped from $317 in January to $200 by November. There are definitely bargains in Granite Bay right now. I misquoted the months of inventory though; it's 48 months for homes over a million and 31.7 months for all homes in Granite Bay.

We've got agents from that area coming down to work in my area -- the central city core -- because nothing is selling there.

Between Granite Bay and El Dorado Hills, do you believe we'll have more inventory than can reasonably be absorbed due to the tighter credit limitations? If so, how do you see this impacting builders the next 3-5 years?

[Elizabeth Weintraub]

We already have more inventory in Granite Bay and El Dorado Hills than can be reasonably absorbed. I suspect that builders, left standing in this economy, will resort to building the old-fashioned way by building on demand and not on spec.

[Ludachris]

Originally Posted by Elizabeth Weintraub

The high median price last year in Granite Bay was a million in January and the median price dropped to $701K. Sales declined 57% over the past 15 months. The average price per square foot dropped from $317 in January to $200 by November. There are definitely bargains in Granite Bay right now. I misquoted the months of inventory though; it's 48 months for homes over a million and 31.7 months for all homes in Granite Bay.

We've got agents from that area coming down to work in my area -- the central city core -- because nothing is selling there.

Great news for bargain hunters... hopefully there will still be some bargains when we're ready to move out to Granite Bay next year.