Sacramento-area home prices are still falling compared to a year ago, but for the first time in almost 2 1/2 years, their decline can be measured in single digits.
In some parts of the state, including the Bay Area, prices are even starting to creep up again.
Sacramento County's $180,000 October median sales price was just 7.7 percent below the median price in October of last year - the first single-digit annual drop since June 2007, researcher MDA DataQuick reported Thursday.
That number represents a significant improvement from 2008, when prices tumbled as much as 37 percent year-over-year as banks dumped foreclosure properties. Banks have since been slower to foreclose and flood the market.
Placer and Yolo counties showed similar pricing trends for new and existing homes combined during the month of October, suggesting that a long, frightening free-fall in area home values is slacking.
"Prices are rational now," said Dean Wehrli, who tracks the Sacramento market as vice president of Sullivan Group Real Estate Advisors. "We've gotten back to the historically normal income-to-housing price ratio."
Though the trend is certainly welcome to area homeowners, it doesn't mean an end soon to the housing downturn that has wracked the region for four years and spread 47,000 foreclosures across its eight counties since the start of 2007.
Unemployment stands at 11.8 percent in the capital region and may rise, while thousands of state workers have been forced to take furloughs that have cut their incomes by 14 percent. Thousands more households still struggle with risky loans and owe more than their homes are worth.
In total, 10.5 percent of California's residential property owners are behind on payments, the Mortgage Bankers Association said Thursday. An additional 5.83 percent are between a notice of default and foreclosure.
Nonetheless, Placer County's $298,000 median October sales price was down just 6.9 percent from October 2008, DataQuick reported. The county also posted a single-digit annual drop in August - its first since October 2007. Median is the point where half the homes sold for more and half for less.
Yolo County, too, saw a pair of single-digit annual declines in September and October after almost three years of far bigger drops. Its $255,000 October median is down 8.8 percent from October 2008.
Michael Lyon, head of Sacramento's Lyon Real Estate, said, "If anything, we'll see appreciation in the first quarter, especially in the lower end."
That's already begun in some parts of California as the share of bank repos in the sales mix continues to drop, and the remaining repos include more expensive homes foreclosed upon after owners lost their jobs.
The nine-county Bay Area saw its first year-over-year increase in median sales prices in two years during October. Santa Clara County saw prices rise 4.8 percent over the same time last year. San Diego County posted its first year-over-year gain in three years. Orange County saw its second straight month of year-over-year gains.
DataQuick analyst Andrew LePage said, "We're looking at a market moving back toward a normal mix of sales across neighborhoods and price ranges. For the most part it reflects fewer foreclosures and, in some cases, more mid- to high-end sales."
Regionally, El Dorado County proved an exception to the trend. Its upper-end housing market especially struggles with fewer buyers and the necessity of cutting prices hard to win them. October sales prices there were down 25 percent from a year earlier, DataQuick reported.
Buyers and sellers closed escrow on 3,670 houses in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties during October, DataQuick reported. That was up from 3,454 in September - the highest tally since July as buyers rushed in before an $8,000 tax credit - now extended - was scheduled to expire.
Though they remain below last year's levels, median prices in Sacramento and Placer have started to show month-over-month increases.
--Call The Sacramento Bee's Jim Wasserman, (916) 321-1102 or email him at [email protected]. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.