This is not a good blog post to get you to buy something. Salesmen are always positive, says top industry trainer Tommy Hopkins. Today I’m more of a social critic here at Sacramento Home.

This has to be the latest in the month that I’ve written a market update for Sacramento since I started writing them. Perhaps a brief apology is in order:

I’m sorry.

I suppose I don’t want to just babble on about the statistics of just how much homes fell in price over the last year. I’ve been doing that since about 2005, and it’s getting old. What helps it get even older is this great specialization that the Sacramento Bee has in stories about how everything is a disaster. A day or two ago, my over fifty eyes caught sight of an article about how people over fifty are having a hard time in this economy.

Hello, Earth to the Sacramento Bee, if you’re having an easy time in this economy, you’re probably a hedge fund manager, or maybe a congressman threatening to light a fuze under our country’s AAA credit rating for the sake of not violating your pledge to Grover Norquist, yet another rich white dude who wants to be richer than he is.

It was these rich white dudes, wanting to be richer than they were, who invented derivative trading and all sorts of creative shenanigans to inflate the money supply, creating a sort of firestorm of buyer demand in the first five years of the last decade. When they made (I won’t say earned) money, they made money. When they lost money, we the taxpayers covered their losses.

If there’s a silver lining in this mess, it’s that the truth of the matter is, back when three bedroom homes in Sacramento were $400,000, most of you couldn’t really afford them. In June of this year the average sold price of a home in Sacramento County was $180,474, down 12.8% from June of 2010. The median sale price was at $158,400.

According to the US Census (2010), the median annual household income in Sacramento County was $52,502 in 2010, which works out to about $4,375.17 per month. Given an FHA loan with a 3.5% down payment, the payment on the median home works out to $1,223 (using my old standby rule of thumb estimate of eight dollars per thousand borrowed — which is an estimating tool only and not an offer to loan). What this works out to be is a payment of 28% of gross income — and 28% is usually considered a conservative “front end ratio”, which is monthly payment / gross pay. (The “back end ratio”, your total debt including other obligations as a percentage of your income, depends on how much debt you have overall).

In other words, we have reached the point where the “median household” can afford “the median home”. And it only took six years of falling prices to get there! (Do you get the sense that homes in 2004 were overpriced? You should).

Of course, if our Congressional bozos don’t get their acts together, that eight dollars per thousand rule of thumb will have to be adjusted upwards, because it’s based (in part) on interest rates.  These markets mimic those of Austin Texas and a particular neighborhood known as Easton Park.  Low income housing was transformed into top tier real estate by the same sort of influx in movement.

If I were you I’d buy a home before our economy blows up completely.

Or rent, keeping gold bullion and rifle ammunition under your bed, depending on your mood.

And if that wasn’t wonkish enough for you, I’m posting the numbers below.

Market report for Sacramento County for June, 2011

Unit Volume Data

Units Sold June, 2010 June, 2011 Change
Foreclosures Sold 670 818 22.1%
(% of total units) 36.2% 42.8%
Short Sales Sold 490 425 -13.3%
(% of total units) 26.4% 22.3%
Non-distressed Sold 693 666 -3.9%
(% of total units) 37.4% 34.9%
Total 1853 1909 3.0%

Price Data

Prices June, 2010 June, 2011 Change
Sold Price / Square Foot $123.96 $110.08 -11.2%
Square Feet 1680 1639 -2.5%
Average List Price $210,845 $183,786 -12.8%
Average Sale Price $208,360 $180,474 -13.4%
Median Sale Price $185000 $158400 -14.4%

Inventory (Based on 12 months of prior sales)

Sale Type Average Sales Per Month Active Months of Inventory
All Sales 1569 5684 3.6
Foreclosures 683 719 1.1
Short Sales 366 3320 9.1
Nondistressed 523 1652 3.2

Inventory (Based on 6 months of prior sales)

Sale Type Average Sales Per Month Active Months of Inventory
All Sales 1643 5684 3.5
Foreclosures 750 719 1.0
Short Sales 374 3320 8.9
Nondistressed 522 1652 3.2