I was reading an article in the Sac Bee today. It says that home prices in some Bay Area cities have neared or exceeded the record highs reached in last decade’s housing bubble and those peak prices are spreading to outlying areas such as Pleasanton & Fremont. "Both are just a few percentage points off their all-time highs set in 2005 and 2006, real estate information service DataQuick reported."
But prices in Sacramento are still 40% below the peak bubble heights.
"The Bay Area’s real estate booms and busts have affected Sacramento for decades. In the past three housing booms, starting in the late 1970s, influxes of Bay Area buyers drove up Sacramento prices, often to levels out of whack with local incomes. Almost 150,000 people migrated from the Bay Area to the Sacramento metropolitan region from 2001 to 2005, a torrent of 80 newcomers a day, according to a Bee analysis of federal IRS data. More people came here from the nine Bay Area counties during that time than from all other counties in the state combined.
Today, the scene is set for the migration to resume in earnest. For the same prices as lackluster homes in Fremont and Pleasanton, buyers in the Sacramento region can take their pick of exclusive real estate."
So, what do you think? Do you think there will we will see similar numbers of people moving to the Sacramento region?
I love talking about this stuff.
Depending on an author's angle, they'll either say that the Bay Area pushes Sac home prices, or Sac home prices drag down Bay Area prices. Maybe it's a little of both. For now, let's agree with them that the Bay leads the way.
As more people from the Bay Area realize how inexpensive housing is in Sac, they will find ways to make the move work.
I just sold a house in Belmont (San Mateo Co, SF Peninsula), 1300 sq ft, built in 1963, 3 bed 1 bath, tiny yard, needs updating, across the street from a garage and a paint store and 4 houses away from a busy industrial and commute corridor, complete with commuter train tracks. Sold for $730,000.
They could take that $730,000 and buy a 3800 sq ft, 5 bed 4 bath 10 year old home with pool on an acre in El Dorado Hills.
Or, if they want something similar in size to what they bought in Belmont, I am currently in contract to sell a home in Natomas (North Sac), 1170 sq ft, built in 2003, 3 bed 2 bath, could use a little paint but is actually move-in ready, $239,900.
As the word spreads about these value discrepancies, folks will start to question the value of living in the Bay Area, as it gets more crowded, prices keep going up and quality of life goes down.
Don't get me wrong. I love the Bay Area. I go there frequently. I'd like to some day have a small house or condo there, but for a family trying to get a start, it's terrible.
No, they already moved here! . Actually back then many had huge equity in their houses from the first bubble, so they sold 1000 sq ft houses for $600k or more and thought they had scored getting a 2000 plus house here for $300k to $500k or a little more. I would guess that most of the bay area owners now are either even or still underwater, but I doubt that tremendous equity exists today.
I suspect they have to have attractive new housing to bring them in. We don't have a surplus of jobs, so there would be the commute issue. Now after FolsomSouth is constructed no doubt many of the buyers will come from the east bay and peninsula.
Actually, their equity is back near or above peak values. San Francisco is ridiculous now. Some of the outlying areas, such as Hayward and Fremont are still behind, but are starting to bounce back. Yes, jobs is an issue right now.
I'm not sure if we will see an influx of people moving here. I foresee people refinancing their homes there and buying investment property here.
That has been happening for quite some time, and as the big-money investors seem to be pulling back from investing here, there is room for the little guy, but it's harder to get a cash-flow rental in some areas. If rates continue to rise, however, there'll be fewer folks able to afford to buy, so investors may still have some good opportunities.
It's all about supply/demand and availability to move.
Those who don't own now are being, or will be priced out of the market to own a home.
Across the country, there is lots of pent up demand to purchase homes. So many people either living with friends, or children living with parents, all just waiting to move on and start a new household as the economy and job situation improves. Just watch what new home builders are doing; the number of new homes being built in long-dormant sub divisions. These companies have the statistics to know what's going on.
The influx will happen
Well said, oh wise one.