While Sacramento area still lags rest of state, prices have stabilized, and foreclosure sales are falling

Sacramento's housing market continued to stabilize in May – but still lagged the recovery picking up speed elsewhere in California.

A new report from market researcher DataQuick showed Thursday that the median price of a single-family home in Sacramento County slipped to $160,000 in May from $162,000 the month before.

But prices were steady compared to a year ago. And when all residential sales were included, including condos and new homes, prices were up slightly in Sacramento County from a year earlier.

The situation was brighter in the region's priciest market. Placer County single-family home prices jumped nearly 8 percent from a year ago, to $275,000.

There were further signs of stabilization in the market. In Sacramento County, just 39 percent of home sales last month were properties that had been foreclosed. A year ago, half the sales in the county were from foreclosures.

The reduction in foreclosure property sales is significant because it will probably prompt some buyers to stop bottom-feeding and start scouting out more expensive homes.

"It is a big deal psychologically and statistically," said DataQuick analyst Andrew Le-Page.

The DataQuick numbers dovetail with reports in recent months from agents and brokers, who say business is picking up despite a nagging scarcity of inventory.

LePage said inventory should loosen up "when prices firm up a little more and fewer people are underwater." People are said to be underwater when they owe more than their homes are worth.

Certainly the volume of sales is improving. DataQuick said there were 57 percent more homes of all types sold last month in El Dorado County than a year ago, and 16 percent more in Placer.

In Sacramento County, sales volume rose 13 percent from a year ago. It was the busiest May for home sales in the county since 2006 – back when the market was cooling but hadn't yet collapsed.

Still, with unemployment at 10.5 percent and state workers facing more cutbacks, the region faces months if not years before the market recovers. The median price for a single-family home in Sacramento County is 57 percent below the peak of $374,000, recorded nearly seven years ago.

By contrast, many other regions are well into recovery mode. The median statewide price rose to $270,000 in May, up 8.4 percent from a year ago, DataQuick said.

The Bay Area, flush with cash from a booming technology sector, is showing considerable strength. The median price rose to $400,000 last month, up 7.5 percent from a year ago.

• Read more articles by Dale Kasler

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