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 outside of the existing City limits..

Probably due to limited new construction, the number of homes sold in Davis has steadily declined over the years. The number of sales in 2009 were down almost 49% from 2002. All markets, stocks, bonds, homes, etc. are driven by supply and demand. The current supply in Davis is lower than normal partially because discretionary sellers are waiting for a market improvement.

Interest rates for conforming loans are currently low at around 5%. Loans over $417,000 but, at or under $580,000, are considered jumbo conforming and, with add-ons are around 6% for Yolo County. Above that asking price, rates are still quite high. Also, the sources for no document and no down payment loans have disappeared. Many buyers are now using FHA loans to get into homes with only 3.5% down plus FHA closing costs. Rates and fees are changing constantly so check with a good lender to find what rate and max loan you can get.

Residential sales prices rose steadily from 2002 and peaked in 2006. (Rural properties not included.) We saw an 8% dip in 2007 prices, a 5% further drop in 2008 and another 8% drop in 2009. That is still almost 25% higher than 2002 prices. Davis homes are still selling at close to the asking price. Data for 2009 shows even fewer sales than 2008. Sales in 2010 are off to a slightly better start than they were in 2009. Homes requiring jumbo loans appear to be hit the hardest. For actual monthly market data back into the late 1990s, contact Julie.

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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 slightly greater drops as square footage increased. The drop in median price has varied among the different areas of Davis.

There have been a limited number of short sales and foreclosures in Davis in the first three quarters of 2009. The steady demand from the University is keeping 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 2008.

The housing crisis has hit California very hard. Prices have dropped dramatically. Consumer confidence dropped to 37.7 in January 2009 (index, 100=1985), a new low. Unemployment continues to climb. Alt-A and optional payment adjustable rate loan resets won't peak until 2010 and 2011. The State budget problems continue to worsen.

These factors make the housing picture look very grim but there are postive factors in the California market. The Federal government is working to keep mortgage rates low. As the Federal funds rate drops, both fixed and adjustable rates tend to follow. These lower rates will help existing homeowners with equity in their homes to refinance at the new, lower rates. Despite the increased inventory from all the bank foreclosures, the unsold inventory has been dropping. The homes going into escrow have climbed and the drop in new construction has eased the excess supply problem.

The drop in prices have hit homeowners in many cities very hard but they have made home ownership more affordable for first time buyers. Lower prices, more choices and lower interest rates have helped many buyers find homes that they can afford and enjoy. The California Association of Realtors economists are forecasting slight growth in disposable income despite the rising unemployment.

Data used for the Davis tables and graphs 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.