In Market Hit Early, Signs of a Recovery

Some see bottom, others 'fool's gold' in Sacramento real estate

By Matt Cantor, Newser Staff

Posted May 5, 2009 8:53 AM CDT

(Newser) – In Sacramento, one of the first US cities to see the housing market crumble, there are glimmers of recovery, the New York Times reports. Sales have jumped 45% from last year, and investors and first-time buyers are on the prowl. “It’s fragile, and it could easily be fleeting,” said an analyst. “But history suggests this is how things might look six months before prices bottom out.”

National home sales are down 7% from last year, and the supply of unsold homes remains high. But sales may now be accelerating with the help of low interest rates and a first-time buyers’ tax credit. Still, increased sales are no quick fix for low prices—and in Sacramento, foreclosures will keep coming, prompting one real-estate CEO to call recovery prospects “fool’s gold.”

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Sales are up 45% in the Sacramento area from last year. (AP Photo)

In this 2008 file photo, a bank-owned home is seen for sale in Sacramento, Calif. (AP Photo)

In this 2008 file photo, a foreclosed home is seen for sale in Sacramento, Calif. (AP Photo)

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Things are awful at the bottom, and we’re at the bottom. No question about it. But the trend going forward should be higher sales, and that will eventually affect prices. - David Berson, chief economist
for mortgage insurer PMI

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In Market Hit Early, Signs of a Recovery