Is this what a bottom looks like?
This city was among the first in the nation to fall victim to the real estate collapse. Now it seems to be in the earliest stages of a recovery, a hopeful sign for an economy mired in trouble and anxiety.
Investors and first-time buyers, the traditional harbingers of a housing rebound, are out in force here, competing for bargain-price foreclosures. With sales up 45 percent from last year, the vast backlog of inventory has diminished. Even prices, which have plummeted to levels not seen since the beginning of the decade, show evidence of stabilizing.
– “Where Home Prices Crashed Early, Signs of a Rebound”, David Streitfeld, The New York Times, A1, May 5, reporting from Sacramento, CA
Signs are starting to emerge of a bottom in Sacramento area housing. Volume has increased year over year for each of the last 12 months in the eight county Sacramento region.
Today’s front page New York Times article had a monthly sales volume chart for just Sacramento County.
Two thirds of 2,092 existing single family homes that sold in Sacramento County in March were foreclosures.
The inventory of existing homes for sale has fallen by half – from 16,262 to 8,189 – in the past 19 months.
The median price in Sacramento County for all new and existing homes sold in March was $165,000 – up from $160,000 in February. I need to get more pricing information, but if it’s true that prices are starting to stabilize, along with this substantial increase in volume, that is what you’d expect to see at a bottom.
It suggests that we are reaching prices at which there is significant real demand.
With historically low interest rates (the average 30 year mortgage rate is 5.03% according to Bankrate.com) and an $8,000 federal first time home buyer tax credit, I believe this is an excellent time to buy your first home.