I Don’t Feel Overvalued…

I know the overvaluation of our local housing market is not news to most people who care about that sort of thing, and I don’t generally like to obsess about this stuff, because I realize that although I am technically sitting on a big pile of potential cash or potential financial ruin, it is also still the place where my shirts and underwear and bathroom are for the time being. But this caught my eye. #11 with a bullet! Whoo hoo!!

But seriously. There are no cities in California outside the top 53. Hey, can we blame people though? But look closer: I am no urban/ecomonical expert, but how is San Francisco the least overvalued metro area in CA? From what I can tell {PDF file}, the most recent median price for Sacto is $377.4, and the most recent median for SF is $726.9. In other words, the other factors about SF would have to account for that difference and also for Sacto being almost twice as overvalued. What am I missing?

But again, I don’t really care. I’m just median-bashing. I’ll leave the rest of the discussion and the obvious factual errors I’m overlooking to the comments box.

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Author: CoolDMZ

"X-ray vision to see in between / Where's my kimono and my time machine?"

15 thoughts on “I Don’t Feel Overvalued…”

  1. SF can’t build out much compared to Sacto. There supply is pretty much set, and we know demand is higher there since we’d all rather be living there than here ourselves. The methodology of that study is pretty weak though. You can’t compare historical prices and project what values should be from that alone. Sacto has likely been undervalued historically.

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  2. Basically, what D said. San Francisco’s housing prices are high as a result of housing shortages, the same way you see high property values in Manhattan, and I would imagine, Tokyo. California in general has high housing prices due to the same supply and demand issues, and also because of zoning. It’s a tradeoff, but our environmental regulations take a lot more land off the table, thus squeezing supply further.

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  3. I must disagree with part of the sentiment expressed by “D” in his/her comment, “..since we’d all rather be living there than here ourselves..”

    While I never expected to be living in Sacramento, the economy was such in 1992 when I was graduating from college that I needed to return to this area. It was against my will, but I’ve grown to love it.

    None of my friends who stayed in the Bay Area were able to buy a nice-sized house at age 25 (as I did 8 1/2 years ago), and my friends who visit me don’t have to circle the block for 45 minutes to find a parking space.

    I can head out my front door for a run and be along the river and away from civilization within less than the length of two football fields.

    We’re finally at a point here where good ethnic grub can be found for minimal cash. My property taxes are a fraction of what friends pay for theirs (now that they own homes, too.)

    The Bay Area is there when I want it for various activities, but I honestly prefer to live here.

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  4. I keep forgetting sarcasm doesn’t always come through on the internet, or maybe I’m just not good at it. I was just trying to make the point that loads more people want to live in SF than Sacto. I personally want to move to a secluded, mountain-filled area in Idaho or Colorado.

    Anyway, it has got to be at the point where anyone who doesn’t own but wants to is actually better off renting. Check out what you can rent for $1000 in Sacto vs. what you would pay monthly to own in a semi-decent neighborhood (along with the real risk of depreciation in the near term). If I didn’t own, I would probably be scared that I would never be able to if I didn’t buy right away, but the reality is that this rise in values can’t be sustained.

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  5. Come on now, not overvalued? I live in East Sac and in less than five years home prices have increased something like three fold. Yes, I meant that they have tripled in that time, the real estate boom time frame. If that isn’t overzeal than perhaps I don’t know what zeal means. I moved here to go to grad school at a supreme discount over living prices in the Bay Area which is what Sacramento used to represent. Yes, I too believe that many people would not live here if they had their druthers regarding geography versus home prices. Sac homes are the cheap seats, the third tier, and now they approach Bay Area price standards. There isn’t the economy nor the living circumstances to justify that price increase given what ordinary home prices would be in a similarly ruralish setting elsewhere.

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  11. what do i care if new home sales are down? i live in an old home. and i don’t work for Pulte or JTS.

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  12. Oops, sorry. Thought this web log was for the 916 masses. I’ll send a letter to the editor to have this link retracted.

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  15. what do i care about a damper? what do i look like, a damper salesman? okay now i’m just being a jerk for no reason.

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