Sacramento Real Estate Blog

There are a few generalizations that I go by in real estate. They’re not universal laws or anything like that, and you’ll find the odd zip code or month where the rules don’t apply. Nevertheless, I find that as a rule:

• The more foreclosures there are in a given area, the more prices have fallen recently.
• The more prices have fallen for any given greater Sacrament area, the more we’re seeing a huge demand this year as compared to last year.

One area where these generalizations hold true to a great degree is the area of East Florin, on either side of the Champion Golf Links, which is to say, the areas 95828 and 95829, which includes Churchill Downs Community Park.

There certainly are plenty of foreclosures in this area. At present some 31.5% of the 679 homes in this area are bank foreclosures (REOs), and another 46.5% are short sales. In April, 2008, 81.7% of sold properties in this area were bank foreclosures, but only 3.7% were short sales.

As you’d expect, then, prices in this area have fallen dramatically. This April the average sold price for a home in East Florin was $209,507, down 35.9% from last year’s average of $326,916. The median has fallen 39.8% during this time, from $302,500 in April of 2007 to $182,000 in April of 2008. Finally, sold price per square foot has dropped 40.3%, from $213.11 in April of 2007 to $127.28 in April of 2008, on average.

With these huge decrease in price, we see a resulting huge increase in demand. From a paltry 40 homes sold in April of 2007, unit volume has increased 172%, to 109 units sold this April.

It will be interesting to see if the demand keeps up. I found a great many good looking REOs available, so I imagine that as most of those short sales continue to turn into REOs we’ll continue to see a strong demand for homes in East Florin.