News feature: Seller's Market
Anthony Davis had been planning to buy a house for more than two years. While renting a room in Citrus Heights, the high school English teacher had been doing his real estate homework – scrimping and saving, researching the market, considering trends, cleaning up his credit, checking out loan programs. By early September 2001, he was ready to get serious, so he started interviewing real estate agents.
And then, on a bright, crisp, late-summer morning, planes flew into buildings, and buildings collapsed into dust.
Davis, like the rest of us, sat transfixed by the horrible television images of airliners used as bombs, of skyscrapers crumbling before his very eyes. But he didn't sit there for long. On Sept. 12, he picked a real estate agent to represent him and and started looking at homes for sale. By early November, after getting beat out by other buyers on two houses, he made a bid on a third, a 30-year-old home in Rancho Cordova. The seller accepted, and he moved in Jan. 2.
The events of Sept. 11, however, were just the opening salvo of a several-week period in which was little in the way of good news for Sacramento and the rest of the nation. The worst attacks ever on American soil – the day’s death toll exceeded anything seen in this country since the Civil War – quickly were followed by anthrax, a looming state budget crisis, war in Afghanistan, the official announcement of a national recession, a shadowy shoe bomber and the utter collapse of energy giant Enron.
But despite perhaps the most uncertain times in America since the Vietnam War, Davis and many other local residents went out and bought houses. The year 2000 was one of the hottest ever for real estate in the Sacramento region, and although things cooled off some in 2001, the regional real estate market continues to be surprisingly robust. Despite the Sept. 11 uncertainty – or maybe, in a weird, quirky sort of way, because of the uncertainty – the real estate market continues to percolate in the Sacramento region.
An Insulated Market
Especially for homes priced above $400,000, Fair Oaks real estate agent Tanya Lush says, the market seemed a bit quieter in 2001 than it had the year before. After Sept. 11, though, the phones simply quit ringing. Lush had a home listed for almost $1 million that was going absolutely nowhere, Stock options for Bay Area evacuees were drying up, the market for expensive homes was flat and seemed poised for a fall, and Lush was afraid she might have to tell her clients to start slashing the sales price. Then suddenly, 10 days after the terrorist attacks, the phones started ringing again – a lot. Buyers, who had grown a bit coy in 2001 and then were silenced by the tragic story unfolding in New York, Washington, D.C. and Pennsylvania, were ready to look at houses again. Within a few weeks, the home Lush had listed was sold with two competing offers.
Mlchael Lyon , the president of Lyon & Associates Real Estate in Sacramento, was expecting a much deeper slump after the terrorist attacks. “I thought it would be much worse,” Lyon says, “but it didn’t happen.” Lush, who works in Lyon’s Fair Oaks office, was curious: Why were buyers suddenly coming out ot the woodwork? “It seemed paradoxical,” she says. “I asked some buyers, ‘Why are you looking now?’ Their answer was, ‘You never know how long you’ve got, so you might as well live the way you want to live.’ “
Geoff Zimmerman is the owner-broker of Dunnigan Sierra Onks Realtors, and she says that, after a post-attack lull, her company’s results in October 2001 were “huge, bigger than ever, and we had an excellent November and December.”
Zimmerman says the Sacramento real estate equation is fairly simple: The market for jobs drives the market for housing. “As long as new jobs keep coming to Sacramento, we’ll be fine,” Zimmerman explains. The capital-area unemployment rate has increased to nearly 5 percent, up from an all-time low of 3.2 percent in late 2000, but the region is still doing better than just about anywhere else when it comes to job growth. According to a study released in mid-January by researchers at California State University, Sacramento, and the California Institute for County Government, the Sacramento area will enjoy a slight job growth of about 1 percent during 2002 – not so hot compared to the 4- to 6-percent growth of the previous two years, but terrific compared to the negative job growth predicted for the Bay Area, California and the United States. “Labor is moving here, there’s job creation here,” Lyon says. “The best job creation in the nation is here in the valley. Sacramento has land and jobs. In Sacramento, Davis and the foothills, we are the luckiest people in the United States right now.”