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Monday, November 12, 2012 CONGRESS

THE SACRAMENTO BEE

sacbee.com

$1

REAL ESTATE MARKET

swooped in to grab bargains. home values in September. Some would-be homeowners The Sacramento regions largdecided to try their luck, too. est real estate brokerage, Lyon By Hudson Sangree said in April that prices would around town, just behind The ramped-up activity has Real Estate, said the Corelogic hsangree@sacbee.com continue to drop this year and Oakland. Five other Califor- driven prices higher and re- numbers understate reality. Six months ago, some that there was no sign of a nia cities, from San Francisco duced the number of homes Lyons data, supplied by its real estate experts predicted bottom for the Sacramento to Bakersfield, also made the on the market, which in turn affiliate TrendGraphix, shows home prices in the Sacra- market. list. creates more upward pres- prices have risen by double mento area would keep fallInstead, the opposite hapSo what turned a real estate sure. digits since the beginning of ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ing, weighed down by thou- pened. Prices made a U-turn dog into a sudden darling? Last week, Santa Ana-based the year. The regions median sands of foreclosures. and headed up. Today, In essence, area home data provider CoreLogic re- sales price jumped from Economists at online Realtor.com calls Sacramento prices dropped so low that ported a nearly 7 percent year- $180,000 in January to STATEMENTS tracker Zillow, for example, the nations No. 2 turn- large numbers of investors over-year gain in Sacramento HOUSING | Back page, A10

Parties tiptoe from fiscal cliff

Home prices take a U-turn

SACRAMENTO NO. 2 ON U.S. TURNAROUND LIST

By Lori Montgomery

Washington Post A10 The Sacramento Bee | Monday, November 12, 2012

WASHINGTON Two years ago this month, the leaders of a presidential commission rolled out a startling plan to dig the nation out of debt. After decades of profligacy, they said, Washington must tell people to work longer, pay higher taxes and expect less in FROM PAGE retirement. A1 $219,000 in October a 21 perLawmakers recoiled from cent increase, Lyon said a the blunt prescriptionsinof news release. Democrat Erskine Bowles Jeffrey Michael, director of and Republican Alan Simpthe But their plan has Censon.Business Forecastingsince ter at the University of the Pabeen heralded by both parties cific in Stockton, said houses as a model of clear-eyed sacriin Sacramento may still be the fice, and policymakers say undervalued, especially investmoment has come to live up ment properties. to its promise. Weve been in returns to When Congress a situation where paying cash (for a Washington on Tuesday, the house) and task facing Presimost urgentrenting it out was generating higher yields condent Barack Obama and than you could find in other investgressional leaders will be ments, which suggests housavoiding the year-end fiscal ing is underpriced, Michael cliff, a towering accumulasaid. tion of $500 billion in budget Even expiring tax breaks cuts and Zillow, formerly so bearish on the Sacramento rethat would abruptly reduce gion, forecasts that home government borrowing but prices will rise almost 6 percould trigger a new recession. cent by the end of the third In the past, policymakers quarter next year. have handled such moments by Thats morepain and givdelaying the than three times Zillows predicted naing themselves new deadlines tional growth budget of 1.7 for getting the average under percent. control. Now, however, the naWhats unclear, however, is tional debt is larger, as a share of the economy, than at any time in U.S. history except for

Change FROM THE COVER brought tighter Housing: Good news, but recovery incomplete races
buyers is gathering steam. Entry-level buyers have been competing with investors, boosting prices at the lower end of the market. ConChange from third Previous rankings Jobless tinued growth depends on quarter 2011 (2012) Rank Median rate move-up buyers feeling confiMedian (third Homes on number of days First Second (August dent and increasing activity in list price quarter) Metro area the market on the market quarter quarter 2012) the middle and upper seg1 Oakland +14.0% -58% -63% 6 2 8.2% ments, Shea said. 2 Sacramento +12.1% -46% -35% 59 30 10.3% He said he expects interest 3 San Jose +15.3% -42% -32% 24 5 8.5% rates to stay at historically low 4 San Francisco +14.8% -40% -36% 51 8 8.2% levels in 2013, continuing to 5 Seattle +12.9% -41% -46% 25 6 8.0% fuel demand. I think that for the remain6 Bakersfield +8.2% -42% -42% 16 7 12.8% der of this year and 2013, well 7 Santa Barbara +25.1% -34% -23% 114 10 7.6% see a lot of what weve seen 8 Phoenix +28.6% -30% -33% 1 1 7.4% already, Shea said. While economists agree 9 Fresno +6.5% -44% -38% 56 9 14.0% 10 Miami +14.6% -22% -34% 2 3 8.9% that the gains could continue Source: Realtor.com Sacramento Bee into next year, they warn against thinking its the start Matt Kryger Indianapolis Star whether Sacramento can sus- that group can carry prices cient to sustain continued of another bona fide housing tain its newfound status as only so far. price increases is uncertain, boom. wo homes were leveled and about three dozen damaged by a massive explosion and fire Saturday night that one of the nations most imAs prices appreciate, the re- he said. Its good news, but it killed two people injured investment declines proved real estate markets. andturn on seven in Indianapolis. Residents described a loud boom that shattered windows, Over the long term, job doesnt mean were back to Investors have been the couldan investorleast three miles away. It wasnt clear what caused said blast, which left 2005, the Stuart Gabriel, dicrumpled walls and from be felt at standpoint, growth is the key. main players dozenlocal mar- he said. about two in the homes uninhabitable, city and fire officials LyonSunday. Story, Page A7rector of the Ziman Center for said President Pat Shea, ket turnaround. But Michael Whether demand from tra- however, said he believes de- Real Estate at UCLA. warned that demand from ditional homebuyers is suffi- mand from traditional homeForeclosed homes have

BLASTS AFTERMATH

TURNAROUND TOWNS

Realtor.com named Sacramento the No. 2 turnaround town in the nation in the third quarter of 2012. Rising prices, shrinking inventory and quickening sales fueled the reversal of fortune. California cities dominated the websites list.

T
Q&A

SACBEE - FINAL - 10 - 11/12/12

been snapped up by investors and havent overwhelmed the Sacramento market, as some TOP-2 SYSTEM feared, he said. But the overall PLUS NEW MAPS economy remains sluggish, RESPONSIBLE Gabriel noted. The Federal Reserve is helping to prop up the housing market by buying billions of By Torey Van Oot tvanoot@sacbee.com dollars in mortgage-backed securities. One goal is to keepnew Backers of Californias interest rates low for monthsvotelection system promised to come. the change would put ers that The reason interest rates more moderate politicians in are so low is the economy overelected office. all Proposition as being result is perceived 14 will relatively weak, Gabriel said. in in elected representatives Struggling and Washington Sacramento economies in Europe andLESS PARTISAN and who are Asia still loom as a potential threat to the econMORE PRACTICAL, supportomy,wrote in the officialcliff ers as does the fiscal state awaiting Jan.forwhen2010 privoter guide 1, the billions of dollars in federal spending mary, when voters approved and tax cuts are set to start exthe change. piring unlesshas now finished California Congress and the first full run of the top-two its Obama administration can reach which sends the two primary, an agreement first. candidates who win the most Call Thethe primary to the genvotes in Bees Hudson Sangree, (916) 321-1191. eral election, regardless of their party affiliation. While more moderate can-

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