As I look back at 2008, the results depend on the lens I choose to look through and it would be easy to say it was a bad year and I am glad to see it end so the promise of a new year can take hold.  However, I suspect, like most of us, there was a combination of good and bad occurrences in the past 12-months. 

From a Sacramento real estate perspective it was a very difficult year.  The early part of the year was marked by high inventory of homes for sale and very few buyers.  Foreclosures continued to dampen the market and, to me, it seemed every transaction we worked on was much harder than it should have been.  As we moved into the summer months there appeared to be a steady flow of buyers coming into the market.  We started getting calls from investors who said they felt it was time to re-enter the Sacramento market.  Business started to pick up and there was a sense of optimism among agents and other industry professionals. 

The financial crisis, bailouts and all manner of media focus on the economy changed cautious optimism into panic.  Clients who had been interested in buying, especially in the upper price ranges, changed their minds and said they wanted to wait and see.  Who could blame them; I would do the same thing.  Sellers, who needed buyers, had only one way to attract them, lower the price until they showed up. 

Prices have continued to fall, sellers who “must have” their price, eventually take their home off the market.  Overall it has been one of the most difficult years in the Sacramento area market that I have experienced as a Realtor and I know it was far worse for others including lenders and escrow company employees.  Will 2009 be more of the same, better or worse?

The good news going into 2009 is even if the economy remains weak, the U.S. government is committed to support the financial system. Taking steps in improve the financial markets is being done by working with governments around the world and seems to be slowly taking effect.  The incoming Obama administration appears ready to continue and expand the Bush team’s efforts to get banks lending, fight off a deflationary spiral and put the domestic and global economies back on firmer footing.

I believe we will start to see some stability in the Sacramento housing market.  I am not suggesting that we don’t still have some downward pressure on prices but I think we will see, in some areas and in some price ranges, price stability and even some upward movement.  I believe we will see buyer’s who took a wait and see posture in 2008 return to the market. At the same time, if we learned anything from our experiences in 2008, we must be mindful that there are likely to be some additional surprises along the way.

If you have a different perspective on 2008 or where our Sacramento real estate market is headed, leave me a comment or send me an email to juliej@jalone.com.  I would love to hear what you think and share it in future columns.  Happy New Year!