The Davis market continues to be reasonably solid despite the mortgage issues. The lack of new homes continues to lessen the impact of the mortgage crisis. Davis is a much more balanced market for buyers and sellers than our surrounding communities.

New subdivision tracts in Davis are less likely to come soon because Measure J requires voter approval of any new subdivision.

Probably due to limited new construction, the number of homes sold in Davis has steadily declined over the years. All markets, stocks, bonds, homes, etc. are driven by supply and demand. The current supply in Davis is lower than normal because discretionary sellers are waiting for a market improvement. Demand was lower early in the year for many reasons but a key cause is interest rates for jumbo loans. Loans over $417,000 were considered jumbo and the investors that make those loans were asking higher rates than they were just a few months ago. Also, the sources for no document and no down payment loans have almost completely disappeared. New legislation has raised the limit for "conforming loans" and FHA loans in Yolo County to $580,000 making many homes in Davis more affordable.

Residential sales prices rose steadily through 2002, 2003 ,2004, 2005 and 2006. (Rural properties not included.) We saw almost an 8% dip in 2007 prices from 2006. That is still over 40% higher than 2002. . The 2008 data through April shows a much slower sales number than 2007 but sales have recently jumped. As of early May, there are more pending sales than the total closed sales for the first four months of 2008. Negotiations on pricing is similar to prior years. Click the back button on your browser after viewing a graphic to return to this text.

Not all home sizes and areas of Davis have acted the same over the past few years. Sales were higher in the second and third quarters of the years than in the first and fourth quarters but it was most pronounced in homes between 1000 to 2000 square feet. Median price has held rather well for homes under 2500 square feet but has seen greater drops as square footage increased. East Davis and West Davis have seen the largest drop in median price.

There may be some short sales and foreclosures in Davis but the steady demand from the University growth should keep Davis values solid.

The underlined links below were provided courtesy of Leslie Appleton-Young the Chief Economist for the Cailifornia Association of Realtors in fall 2007.

It is not surprising that the California market is correcting. Interest rates seemed affordable on many adjustible rate mortgages when the buyer was given a low, teaser rate. Rates increased when the loan adjusted upward. The climb in Federal funds rate added to the problem. Lenders were overly aggressive and made many loans with little cash down and to many sub prime borrowers resulting in loan defaults.

As lending criteria has tightened, sales have decreased and prices have dropped. The number of homes on the market has climbed. This isn't the first time home prices have dropped in California. What has happened in the past when prices dropped was that the number of sales fell but owners just chose to not sell until pricing improved. Because of lax lending there are foreclosures happening but the market will recover again. California is growing and so will the demand for housing.

Data used is from the Yolo County Association of Realtors Multiple Listing Service. It is believed correct but is not guaranteed. It does not depict all sales in Davis.