Davis is different: a rant who's time has come

On a blog I regularly read, a poster commented on the housing market in Davis and how he felt that the local paper would never accurately cover the decline. I agree whole heartedly that the Davis Enterprise is not going to do any real reporting on the housing or rental market. They are far too beholden to local landed gentry, no matter how independent and liberal they feel themselves to be.

We had Measure X last fall which the citizenry voted down. I really believe the only reason it didn't pass was because too many property owners were worried about additional inventory reducing their perceived equity.

But those local home owners didn’t really perceive that the whole slow growth argument behind “NO on X” had been defeated long before we went to the polls. Woodland's new developments are fast approaching the Davis city limits. This of course makes the failure of measure X moot. These new homes are superior to most of the Davis. They are larger, family friendly, and just a 10 minute drive away from central Davis. “Exclusivity” is not going to save the Davis market.

The big employer here is UCD which is awful about employee compensation, the exception of top administrators and some faculty. There are not enough of those choice positions to save the Davis market. Most UCD employees are older and either bought here years and years ago. The younger workers generally commute in from other areas. So UCD is contributing to the problem, not solving it.

In addition, UCD can't seem to attract new talent to the campus which could become buyers either. In fact, the whole UC system is loosing employees. Some workers are leaving for positions at other universities out of the state with comparable pay. Others are retiring and relocating out of the area, selling homes to cash in on equity gains and taking their retirement nest eggs with them. So the local economy is not propping up values.

So who is left to save Davis from the Bubble?

Until recently parents of UCD students would buy a condo or house for their child to live in while they attended school. The proud parents would then sell the house after son or daughter’s graduation. We used to see this begin each spring, leaving few homes on the market for the local population.

However, Spring 06 in Davis was dead. Recent graduates aren't remaining. The employment opportunities in areas with healthier housing markets are too numerous to entice them into staying. As inventory continued to increase into the summer, I’ve seen everything from serial re-listings to hide the days on market to price haircuts of up to $50k in one swift stroke. The few buyers left in Davis demanded price reductions or incentives, often both.

That means the only target market left is families commuting into Sacramento. Woodland, with its better housing value, is just as easy to commute from as Davis. But with prices declining in Sacramento, why does the buyer need to commute at all when homes near their employer are usually much better priced?

But what about the few Davis home owners who were commuting to Bay Area jobs? They are either currently trying to sell or have already left.

So to summarize, Davis' sustainable housing value is pretty much a figment of realty marketing imagination.