Housing Prices Starting to Rise? (Sacramento, Brea: sales, foreclosures, mortgage)

[NewToCA]

Median Home Sale Prices Rise for Most of Sacramento Region:


Median sales prices climbed throughout most of the capital region in May – dramatically rising more than 9 percent for existing houses in Sacramento County...A count of 3,420 closed May escrows in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties represented a 14th month of year-over-year sales gains and hinted that some counties may have finally seen their lows for median prices.


Median home sale prices rise for most of Sacramento region - Sacramento Business, Housing Market News | Sacramento Bee (http://www.sacbee.com/business/story/1959514.html - broken link)

[Phil Minor]

Median price of housing can rise for two different reasons. It can rise because the value of each individual house is increasing or it can rise because the composition of homes selling in the market is shifting. At the moment the latter appears to be the case.

What is happening is that the foreclosure problem has expanded beyond subprime loans. As foreclosures are becoming more common in the more expensive neighborhoods, more of these homes are being put on the market. At the same time the wave of subprime loans in default is starting to lose momentum. That means going forward there will be fewer super cheap homes selling in Meadowview and Del Paso Heights and more homeowner's in default in the expensive neighborhoods.

Home Front: State's mortgage crisis creeps beyond subprime territory - Sacramento Business, Housing Market News | Sacramento Bee (http://www.sacbee.com/736/story/1959598.html - broken link)

http://economist.mrwhipper.com/IMFresets.jpg (broken link)

While more of these expensive homes are going into default, these more expensive homes in the area aren't moving. This is what is creating the pressure to cut prices here.

Sacramento area misses move-up homebuyers -- they're staying put - Sacramento News - Local and Breaking Sacramento News | Sacramento Bee (http://www.sacbee.com/topstories/story/1959684.html - broken link)

The median is going up, not because housing prices are going up, but because the composition of sales in the market is shifting. As the foreclosure problem has spread beyond subprime, that is changing the composition of sales. Its that shift in the composition of sales that is pushing up prices, not an actual increase in the price of the underlying homes.

State unemployment is setting new records in the modern era. When the local unemployment rates get released later today, I am sure that too will be higher as well. When people are worried about losing their jobs, they aren't in a hurry to escalate bidding wars over homes. Its the composition of homes that is pushing up the median, not a rebound in pricing.

Calif. Unemployment Highest In Modern Records - Money News Story - KCRA Sacramento (http://www.kcra.com/money/19800483/detail.html - broken link)

[Majin]

I'm not going to dispute your data but if you actually try to buy a low end house (< 200k) you will have a drastically different perspective on the "housing crisis"

The competition on lower end homes are insane. From my experience, houses are selling for +20-30k more than the asking prices and they are selling within a week or less. I had a hell of a time trying to buy a house a few months ago. Experiencing this it wouldn't surprise me in the least that the median prices are edging up.