I've been beating this dead horse for over ten years. Investing in real estate in Davis, CA is a safe bet relative to other areas within the Sacramento area due to the influence of UC Davis. Prices in Davis have fallen 10-15% from the peak of the market in 2005, whereas in some communities like Woodland, West Sacramento, Natomas, Elk Grove, etc. home values have tumbled over 30%. It's a matter of supply and demand. A recent article in Newsweek, (Feb. 18) illustrated that as student populations continue to increase, (enrollments are increasing twice as fast as the general population), combined with the attractive lifestyles, good healthcare and employment these communities offer, it's a bright spot on the real estate radar. "Activity around college campuses should really hold up, better than the market as a whole," says Walter Molony, a spokesman for the National Association of Realtors.
Over the years, I have assisted countless parents of incoming or returning UC Davis students investing in the Davis market. Condos, split-lots and affordable starter homes are all wise choices, and they're sprinkled throughout the city. There's no one student ghetto in Davis where students are aggregated. Housemates often pay rent to help defray the mortgage costs, and by the time of graduation, looking three to four years into the future, values could certainly be much higher than today, creating a nice profit when the home is sold.