Last week the Housing Price Index came out with the 3rd quarter housing appreciation numbers. The great news is that Sacramento real estate has appreciated in value 56.9% over the past 5 years. Do you realize that represents an average growth rate of 11.38% per year over the past 5 years? So, if you bought real estate in the Sacramento MSA in 2002 or before, you made a great investment.
Of course that's only part of the story. As you read in Found In Translation, Sacramento real estate has been continually dropping in value since the market peak of the 3rd quarter of 2005. So, if you bought in 2005, you bought at the top of the market and your property is likely worth less now than when you bought it.
For Sacramento commercial real estate, particularly retail properties, this does not bode well for property values. The old adage that "retail follows rooftops" is true. In 2003-2005, throughout Sacramento you saw a glut of new homes going up. In Elk Grove, Roseville, Folsom and Natomas, new retail was everywhere because that is where most of the homebuilding was occurring.
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