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A blog about the economy and the Sacramento-area real estate market.

November 6, 2009
Sac-area new home sales will reach 1999 levels again in 2016
For that vast swath of humanity beyond the 200 building industry representatives who attended Thursday's 2009 regional housing forecast presented by the North State Building Industry - here is the Powerpoint presentation by Greg Paquin of the Folsom-based Gregory Group. All the charts and graphs you could ever want to see.

Among the most spectacular predictions:his belief that it may take another seven years for capital-area home builders to get back to what they were building here in 1999.

That would be in 2016 - when he projects sales of 10,921 new houses in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties.

 As for this year: Paquin predicts 3,048 sales in the six-county region. The good news, he told builders who know pretty much nothing but bad news, is that 2009 should be the absolute bottom of sales levels.

Builders in 2004 did almost 18,000 sales in the region.

Paquin called the current situation in the region "an economic recession and a housing depression."

One of the most interesting observations, however, was the consultant's reference to a massive "brain drain" from the Sacramento region's residential construction industy. Economists say the sector has shed 26,300 jobs. Said Paquin: they've all left the business, left the area, retired or moved onto new businesses.

Yet as a result Paquin foresees "an industry that will become younger and more sophisticated." That will be especially important as the entire home building business goes green, he said. Make no mistake about it, he told the crowd about the implications of California legislation and global warming initiatives to reduce energy use. Homes will be green.

"That train has left the station," he said.

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