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Today, Sacramento Real Estate Voice is pleased to have one of our local Sacramento appraisers, Ryan Lundquist as a guest blogger sharing his thoughts on how Sacramento real estate is tied to unemployment. Take it away Ryan…
Good Deals & High Unemployment Rates
We hear many stories about how the economy is turning around. Granted, there have been some positive signs, but overall the unemployment rate in the Sacramento area is still extremely high. There are certainly some incredible deals out there for making a home purchase, but there is also a long way to go before our local economy is fully recovered. For some context, let’s look at graphs of sales and unemployment rates in Folsom, Rancho Cordova, Galt and North Highlands.
Folsom Real Estate and Unemployment
Sacramento County has an unemployment rate at 12.6% for June 2011, but the City of Folsom has maintained a very low unemployment rate for the market area. The only other two areas under 5.8% unemployment are Gold River (2.5%) and Rancho Murieta (4.2%). Why has Folsom’s unemployment stayed relatively low?
Rancho Cordova Real Estate and Unemployment
The City of Rancho Cordova has shown a very clear decline in property value over the past three years and the unemployment rate has simultaneously increased significantly. What do you see?
Galt Real Estate and Unemployment
The City of Galt has shown a similar trend to Rancho Cordova in that unemployment has increased and hovered around the same level over the past two years.
North Highland Real Estate and Unemployment
It’s interesting to see somewhat of a rainbow curve in property values in North Highlands. What stands out to you in the graph?
What impression do the graphs give you? What are the positives and negatives to take away when looking at data like this? How do you see unemployment impacting real estate? I’d love to hear your thoughts.
Ryan Lundquist is a Sacramento area real estate appraiser and owner of Lundquist Appraisal Company. Connect with him on the Sacramento Appraisal Blog, Facebook, Twitter, YouTube, email or 916-595-3735.
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Thanks Gena for letting me guest post on your blog. It’s an honor. It’s amazing to see what our market has done over the past five or so years.
Always a pleasure to have quality articles on Sacramento Real Estate Voice to share with the Sacramento home buyers, sellers, homeowners and investors.
Great presentation of unemployment vs. property values. It’s interesting to see the various degrees of unemployment in your area. Thanks for sharing.
Thanks for popping over Tom and commenting on the Sacramento Appraiser’s article
Gena, there is simply no question that unemployment plays a major role in property values but I would call it a leading indicator. Ryan’s graphs show a four year period but there is more downward pressure to come. I think of it like a wave on the beach. The unemplyment crashes onto the beach in a fairly short period of time, but the decline in home prices are the wave moving back out over time. Great use of graphs to illustrate what we can all feel as we watch the tide roll out….ahhh but this is California and we have all been here before…I will still be standing here when the tide comes back in!
Thank you for your insight and probable conclusion.