Sacramento Housing Market Crushed In 2007

“What you’re starting to see right now with the foreclosure inventory swelling is the banks are getting aggressive….. I think 2008 is going to be a year to remember.”

– Mike Toste, a Lincoln based real estate agent

On the front page of Friday’s Sacramento Bee was an article about December home sales.  One number really jumped out at me: 38.3% of all home sales in the eight county Sacramento region in December were homes that had been repossessed by banks.

If that wasn’t enough, the median home price dropped 20% in Sacramento County and 13.3% in Placer County in 2007 – and are 27.6% and 29% off their August 2005 peaks, respectively.  Total sales volume for the 8 county region was down about 23% from 2006.

Volumes are falling off a cliff even as prices crash.  This means that, even at these lower levels, there still aren’t many buyers.  That means prices will probably continue to fall in 2008.