If you own a house, congratulations: Your home is worth more—considerably more—than it was a year ago.
After seven years of declining home values, the Sacramento real estate market is back with a vengeance. Multiple offers and bidding wars are commonplace. Open houses are packed with would-be buyers. Real estate agents are desperate for listings. The result? “It’s as cutthroat as I’ve ever seen it,” says longtime agent Tony Yuke.
When the economy crashed in 2008, the Sacramento region was one of the country’s hardest hit. After peaking in mid-2005, real estate values already had started a slow descent before tumbling 50 percent in the aftermath of the subprime mortgage crisis. Hundreds of thousands of local homeowners found themselves underwater, their homes worth less than they owed on their mortgages. Foreclosures and short sales were depressingly common.
But by late last year, things had started turning around. Investors, tantalized by affordable prices and low interest rates, snapped up thousands of properties. Increasingly confident about their economic prospects and tired of waiting on the sidelines, first-time homeowners and move-up buyers began making offers. Under the law of supply and demand, all that activity had a predictable result: an increase in prices. According to the real estate tracking firm Zillow, prices in the region shot up 20 percent in March from a year earlier, the fourth highest gain in the nation.
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