Is the California Northstate Univ. proposed hospital pushing down Stonelake listing prices?



Since the December 2018 unveiling of California Northstate University's massive hospital project in Elk Grove's Stonelake neighborhood, speculation on the project's effects have been widespread. Proponents have trumpeted the jobs it will bring, while many Elk Grove residents have questioned the appropriateness of placing a 12-story 400-bed hospital in an existing neighborhood.

While the final determination of the project and its financial viability are years away, battle lines are drawn. The most visible group opposing the project are residents of the Stonelake neighborhood.

Among many concerns, residents have said they fear the project, which will be built on the site of the current Stonelake Landing shopping center, is the effect the hospital will have on their home values. The concern, which is typical for families facing uncertainty in their neighborhoods, is emboldened by the fact that for a vast majority of American's intergenerational wealth is tied to homeownership.

There have been suggestions home prices in Stonelake are already negatively affected. While the data on that is scant, and it will take a longer-term to ascertain if that occurs, in the short run a look at listings for houses for sale in the area can indicate if the project is affecting activity. 

One item to examine is listing prices and if there have been decreases. To analyze this, listings in two Elk Grove neighborhoods were studied.

One was the Stonelake neighborhood, and the other is the Tributary Pointe neighborhood in east Elk Grove. Given both subdivisions are about 20 years old, were approved before Elk Grove's cityhood, and they have similarly priced houses. 

Additionally, Tributary Pointe is about nine miles from Stonelake, making it one of the furthest large subdivisions from the proposed project.  Tributary Pointe is bound on the north and south by Bond Road and Elk Grove Boulevard and the east and west by Waterman and Bradshaw roads. 

According to the information posted as of July 21 on Zillow.com, there are currently 14 homes listed for sale. Of those 14, five, or 35-percent, one-third have had their listing prices decreased. These properties are the following:
  • Tundra Circle, $4,1000 price decrease July 20
  • Ruddy Duck Way, $9,100 price decrease July 17
  • Lake Sparrow Way, $10,100 price decrease July 16
  • West Pintail Way, $21,000 price decrease July 15
  • Bobbell Drive, $30,000 price decrease July 15
See video posted below for more information on these listings. Best viewed in full-screen. 

By comparison, in the Tributary Pointe neighborhood, as of July 21, there were 11 listings, and only one, or nine-percent had a price decrease. That property is on Oakley Way, and the price cut was $5,000.

It should be noted in the Tributary Pointe there were two houses - not included in the 11 above - that were scheduled for a foreclosure auction sale, and four houses in some stage of the foreclosure process. In Stonelake, there was one house in some stage of foreclosure. 

While the Tributary Pointe neighborhood had six in the foreclosure process, and Stonelake had one, Stonelake could be considered a more stable community. It would intuitively seem a more stable neighborhood would have more demand, firmer prices, and conversely less downward price pressure. 

As we have seen in the analysis of these two neighborhoods, it seems that prices are dropping in Stonelake, perhaps because there is less demand? Could the lower demand be a function of the CNU project?

Many factors could explain the lower prices in Stonelake. Perhaps listing agents set unrealistically high prices, or Stonelake, which is in the 95757 zip code which Zillow rates as warm, is more in step with the 95758 zip code which Zillow rates as neutral. 

Regardless, as the CNU project progresses, it will be worth watching how listing and sale prices fare in Stonelake. 

If the CNU hospital wins approval - and more importantly secures its financing - and homes prices suffer in Stonelake and other nearby neighborhoods like Lakeside, it should be a lesson for any Elk Grove family hoping to pass intergenerational wealth. That lesson is if the Elk Grove City Council can do this here, no neighborhood - and by default, your most significant source of wealth - is not beyond their reach.  

Caveat emptor


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1 comment

D.J. Blutarsky said...

EGN needs to back off. Elk Grove is a strong regional destination for quality housing everywhere you look. There's a simple explanation for those price reductions: seasonal price fluctuations!

Stone Lakes (Valley Hi 2) is the premier housing tract protected from floods by a levee system, ala Holland! Like living in Europe in our very own Grove! In fact on Wednesday night's City Council agenda, the City proposes to spend $562,000 to investigate the condition of the levee so we don't have another Natomas building ban on our hands.

And on the subject of quality housing, watch the lower Bruceville corridor (Mack Road 2) and its slew of "supportive housing" that is going in! I'm talking quality stuff here!

And don't forget about the Franklin area (South Highlands). They have one of the top high schools in the area and are cranking out college scholarships like no one else.

And don't forget about the neighborhoods near Old Town. The City is pouring some major money into that area like nobody's business. Food Truck Mania and Concerts-by-the-Tracks (Carmel 2) will be the savior for that area!

And finally, this brings us to the Civic Center (Rodeo Drive 2). What can I say? Anchored by swimming pools and a shoehorned Vets Hall and Senior Center, with specialty foo-foo bistros--this will be a boom for property values for the entire city!

EGN needs to be more supportive of Elk Grove, the Hidden Gem of the Valley!

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