Buying a Home in Land Park: Is Your Equity Secure?

To understand what is going on in the marketplace, it's imperative to analyze the statistics. Because sometimes statistics all by their lonesome selves can be misleading. For example, in this morning's newspaper, the Sacramento Bee says 10,000 jobs were lost last month in Sacramento. The Sacramento Business Journal reported yesterday that the July Sacramento unemployment rate is 7.3% but that 2,900 (29% of those jobs) were in the leisure and hospitality area, and 2,400 of those were in the bar and restaurant business (when people cut back, they quit eating out). Moreover, the decline in jobs is seasonal, especially at this time of year.

The Trendgraphix report released yesterday for home sales in Sacramento County says home sales increased 1% and inventory fell 3% in month-over-month comparisons between June and July, and the per-square-foot cost decreased 3%. Overall, the median price has fallen 36% over last year.

What does this mean for home owners and home buyers in Land Park?

Does it mean your equity is in jeopardy or if you buy a home that it will lose value? You'd certainly think so by reading the above statistics. However, all data can be broken down to specifics. If you look at the neighborhood values of homes in Land Park, you will see that inventory (the number of homes for sale) has fallen. Simply put, there are much fewer homes for sale than a year ago. In July of 2007, we sold 17 homes at an average price of $609,000 as compared to this July when we sold 8 homes at an average price of $433,000. This does not mean that home values have fallen; it means there are more buyers for lower-priced homes in Land Park.

Last July, we had two sales over $500,000, and those homes sold at list price. Year to date, 26 homes have sold in Land Park as compared to the same time last year when 44 homes sold. There are fewer buyers and fewer homes for sale. Sacramento County has 3,850 short sales for sale and 2,338 REOs. In Land Park, we have 6 short sales (five of which are under $500K) on the market and one REO.

Land Park is a desirable neighborhood, within close proximity to downtown, and neighbors love the quiet, tree-lined streets. Yesterday, a home on 14th Street came on the market, a rebuilt Tudor with extensive attention to detail for $1,190,000. Last week, a home in Land Park sold for $1,600,000. Even though there is pressure in the job market and economic stresses in the county, not to mention our high gas prices, last time i looked, they aren't whipping up any more land in Land Park. Our specific market has been relatively unaffected by the housing downturn in Sacramento. Out-of-area buyers aren't marching in by the droves to buy homes in Land Park for 70 cents on the dollar.

If you're looking for a neighborhood where your home value will be protected, personally, I don't believe you can do any better than buying a home in Land Park.