The central valley is now called ground zero for the housing bubble. Foreclosure buses and tumbleweeds blowing through new home subdivisions are the nightly fodder for the national news shows. Sacramento is reported to be leading the nation for declining home prices and consumer debt levels. With this kind of news coverage, if you were a national or international company looking to expand your operations, open new retail stores, build a new factory, research facility or call center, would you want to locate to an area that carries the stigma that Sacramento now carries? And if, as I believe, companies avoid Sacramento until the memories fade of the "greatest housing price collapse since the Great Depression," will this further dampen prospects for future growth (and home price recovery/appreciation) in the central valley?
What are your thoughts?
Paul
P.S. California's financial uncertainty arising from the state budget deficit and proposed new state taxes are perhaps at least as important factors that a company might consider as it reviews possible new business expansion sites.
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4 comments:
Sustained low price housing will give people more disposable income and restart the migration from the higher cost coastal areas.
The prices got way too high, but the Sacramento Valley is still a nice place to live, just like it was a nice place in 2002 when the houses were selling for the same price.
I have to agree with sacramentia. I have traveled all over the country, and compared to most areas Sacramento is very nice - especially the climate. I see more persistent, long-term stagnation for the rust-belt, upper mid-west areas.
I know what you're saying, but I don't think that kind of media coverage would be enough to keep retailers away so much as an overall gloomy economic outlook for the region or state (as you mentioned) would keep them away.
We still have many large retail projects in the midst of construction that have yet to open their doors. There's the expansion of the Roseville mall and the massive shopping center across the street which is being built. There's the mall in Elk Grove, and finally there's the mall in Folsom (due in 2009).
We're already seeing some retailers start to close their doors so IMO, it doesn't look good for the stores that aren't even open yet.
The panic in real estate has been overstated, and prices in Sac will (or are now) stabilize, then prices inevitably will go up.
Homeownership is for the long run, and very important. Buy-hold.
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