As other hard hit areas started recovering from the recession two years ago, the Sacramento region has shown recent signs of a revival. The Sacramento economy was suffering even before the recession hit the nation four years ago. With over 145,000 jobs lost since 2007, a fifty percent decline in home prices and a 10.9% unemployment rate, that left many locals feeling the effects of a depression. Now economist, business owners and real estate professionals are predicting a break through in 2012.
The huge cloud hanging over the local economic recovery is the housing sector, which had another dismal performance in 2011 and might be a couple of years from going full throttle. The surplus of foreclosure homes and short sales will continue to depress prices for months. Housing construction has been weak for years, but should have a glimmer of light this year. The downturn began in 2006 and the key element was the real estate debacle. When homeowners are losing jobs and homes, not paying their mortgages or property taxes, this creates havoc in many segments that depends on these tax dollars.
Banks have to take responsibility for their part for the real estate turmoil and put more emphasise in clearing the back log of foreclosures that are dominating the Sacramento housing inventory, shorten the amount of time it takes to process a short sale and start lending money for mortgages to capable and qualified home buyers. With the plummeting home prices and mortgage rates at 3.91%, there are buyers that are anxious to purchase a home, but unable because of the stringent guidelines imposed by the banks and mortgage companies.
Local economist point to Sacramento’s job numbers as the key gauge of the economy’s direction. Jobs need to be the region’s main focus. Industries such as health care and high-tech are leading the way and have started hiring again. Most businesses in Sacramento remain skeptical in their outlook, targeting the less than stellar real estate market and the possible budget cuts by the state. Sacramento got a big boost in November with over 4,400 seasonal hires. Those numbers were higher than the typical hires during the last few holiday seasons. Diminished unemployment rates will accelerate the overall recovery.
There are signs that are pointing toward a signficant improvement for the Sacramento region in 2012. Will the presidential election have any effect on our recovery? Have home prices hit bottom? Anyone have any ideas that can expedite the recovery? Please visit my website www.JohnnyBrooksHomes.com for helpful tips on buying or selling a home, scan my other informative blogs and easy access to view local area homes for sale in Davis, California and the surrounding communities.