Sacramento real estate woes to continue for decades, experts say
Time for region to embrace change; Why Texas? Negative real estate news continued to pile up this week for the Sacramento region. First t...
https://www.elkgrovenews.net/2010/10/sacramento-real-estate-woes-to-continue.html
Time for region to embrace change; Why Texas?
As the story states:
Decades long recovery...
Negative real estate news continued to pile up this week for the Sacramento region.
First there was a story from the Wall Street Journal listing the Sacramento as the eight most stressed real estate market in the country. The data comes from Real Time Economics and includes three economic indicators: percentage of homeowners in an area that spend more than 30% of their income on mortgage payments; the percentage of people in the region without health insurance; and the percentage of people without jobs.
As the story states:
Financial advisers warn against spending more than 30% of a household's income on housing costs, as it can crimp other expenditures and savings. It also leaves little room for unexpected shocks to income, such as illness or unemployment. Miami was at the top because it had the highest percentage of mortgage holders spending more than 30% on housing among large metro areas — 57.7% compared to the national average of 37.5%. At the same time, a quarter of the city's residents are without health insurance — compared to the national average of 15% — making it difficult to deal with a the expense created by an illness and still pay a mortgage.
The problems also can feed on one another. A housing bust can lead to unemployment as construction and other real-estate related jobs dry up, which then pushes more people into foreclosure. For example, Redding, Calif., has more than half of its mortgage holders paying more than 30% for housing, a 2.7 percentage point increase from 2007, as the ratio of unemployed-to-population in the city jumped six percentage points over that time to 41.6%, compared to a national average of 33.1%.
The story continues with a list of the most stressed markets in the country. The Sacramento region was listed as the eighth most stressed real estate market with 48.4% of mortgages account for more than 30% of income, 12.8% without health insurance and 35.4% of the population not working.
Decades long recovery...
The second report was far more ominous, particularly for baby boomers looking to tap their home equity to fund retirement and others hoping to see a quick return of home values.
Generated by Fiserv based on data they provide for the well-respected Case-Shiller index, the report paints a dire picture for area home values. According to Fiserve, home values in the Sacramento region won't return to their 2006 peak values until after, hold on to your chair, 2039.
Obviously even if this report is way off in their prognostication, it should be evident home values and our much of our construction and real estate related economy that we have become so dependent on, will be depressed for years to come.
Nevertheless, while city and business leaders have long touted the strong real estate markets in their dialogue, they need to refocus and tout our areas relatively affordable housing and promote our affordability.
Recently several politicians have pointed to Texas as an example of a state aggressively recruiting businesses to relocate there. While these politicians blather on about the lax business regulations in The Lone Star State as the reason businesses relocate there - they fail to mention a big draw for employers - reasonably priced housing for their employees.
It is time for city leaders to draw on the fact that Elk Grove has an ample supply of relatively new, large, affordable houses as a recruitment tool. I lived in Texas for five years and trust me, considering our relative comparable homes values now given our steep decline, there is no way I would give up the Sacramento region on even our hottest mid-summer day for the heat and life-zapping humidity of Texas.
Now that's something Texas can ever duplicate.
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