Michael Janzen

This bubble burst is one lesson I will never forget. Today I got my monthly report from Zillow in my email inbox. It brought more bad news. On the positive side I can already see some good indications coming in from elsewhere that say the economy is beginning to turn around. It just doesn’t look like it by looking at my home’s recently reported value.

Below is a screen shot of a report on Zillow.com for the Sacramento, California housing market. Looks pretty bad. You can also read the full report.

Below is a snapshot of my home, local market, and the national market. As you can see the Sacramento area has been hit very hard. My take is that this is what happens when McMansions go up like mushrooms and then the roof figuratively caves-in.

I’m no economist but while we see positive trends in consumer confidence and in other areas I don’t expect to see any real economic rebound until all our homes get a little less upside down. Too many Americans feel like they are stuck in debtors prisons. When people begin to feel less stuck I’m certain that overall consumer confidence will rebound and spending will return.

While this is sad for the rest of America, (more spending means more debt), it will have a positive side effect for those of us that are looking to downsize. We will be able to make our move, literally. Until then we sit patiently paying the piper for our past presumed prosperity.

(Sorry… I couldn’t help the allure of an awkward alliteration.)

I got another email on my home’s value from Zillow.com this morning and it shows the curve making a turn upward! These numbers could simply be a market fluctuation due to a temporary increase in home sales. It is fall after all, a traditional time to make last minute moves before the school year begins. But I’m hopeful that maybe it’s a sign we’ve hit bottom and might start to see a slow climb back up. As you can also see these numbers aren’t reflective in the US (dark blue) or California (light blue) chart lines, just my house (dark green) and Sacramento (orange).

I get a newsletter from Zillow.com regularly with an update on local home values. There has been no good news for a long time, home values continue to drop here in California. Below is a chart that shows the most recent numbers. When you add this to the overall outlook for the economy it looks like millions of people are going to be stuck in their homes or seriously considering letting the bank take it back simply because the climb back up is looking longer and less likely.

Another option I’m still keeping in the back of my mind is adding onto the house simply to raise the value. I definitely don’t want any more house myself… I have too much as it is… but I can see adding on right before selling. But for now we’ll just continue to hang on and hope for the best.