I'm back from listening to Leslie Appleton-Young, chief economist for the California Association of Realtors, who says 2009 will be grim and tough on the economy. But she adds that sales will surely boom in Sacramento, which is again affordable and a beacon for first-time homebuyers.
"The great news is you guys are booming," she told a room of several hundred area Realtors, members of the Sacramento Association of Realtors."Your market is clearing. Markets do clear."
(Click on the SAR link above to see the economist's Powerpoint presentation. Lots of details for national, state and local markets).
"Affordability is way up for first-time buyers," the economist said. "I can't imagine a better time for a first-time buyer to get in the market."
She said CAR projects that sales will rise eight percent statewide from last year - driven mostly by sales of bank repos in Sacramento, the Central Valley, Inland Empire and new outer rings of San Diego. Median prices could fall up to 25 percent statewide, but not that far in Sacramento. It's already taken the bulk of its hit to pricetags and moved on, she said.
Sellers, on the other hand, are feeling the pain. In a survey of them, the four common responses, she said, were:
- I can't make my payment.
- I'm underwater.
- I need to save my money.
- I need to get out.
Appleton-Young, a 25-year CAR veteran, seemed somewhat perplexed by the huge wave of macro events occuring in this economy and housing market. What will be the effect of the Obama Administration's plan being unveiled tomorrow? The $350 billion TARP plan and the new $787 billion stimulus? Nothing behaves in a predictable way. It's hard to know.
"Look at your old map, kiss it goodbye and start over," she advised. "We have a different market."
In a light moment she showed an editorial cartoon of a guy on a ledge ready to jump. A voice from a window says, "Wait, don't jump until you hear what Alan Greenspan thinks."
The guy on the ledge says, "I am Alan Greenspan."
She noted that the past year has been tough on real estate agents. Membership in the CAR, which peaked at 211,000 in 2007, is projected to fall to 158,000 this year and "my guess is we're going down to 135,000," she said.
The crowd applauded.
"The membership decline we are seeing is a weeding out of people who have had enough," she said. "They're people who came in during the boom thinking this is easy. Well, guess what? It's not."
There was lots more, some of which we will get to in a print story running tomorrow.
In a nutshell, however, she said she sees prices firming in the Sacramento area and sales rising. Months of inventory - the time it would take at today's sales rates to sell every house on the market in Sacramento County and in West Sacramento - is under four months.
That, too, drew some applause in a market where it was once feared that repos would become a pile so big that the capital region might take forever to dig out of this.