My husband and I bought into the Sacramento housing market 20 years ago so I used to live secure in the knowledge that my house had appreciated hugely in value, a cushion against a lost job or unexpected expense. Then Dale Kasler, and Andrew LePage, reporters for the Sacramento Bee and friends of mine, wrote a series - Built on the Boom - that informed me my house may not be worth quite as much as all those folks pushing me to take out a home equity loan keep telling me.
Experts say Sacramento area homes are over valued by 54%. That's because home prices have far outstripped incomes and because many folks bought their high priced homes with ultra high-risk loans like 100% interest-only mortgages.
The experts predict housing prices will fall within the next two years. That upsets not just my peace of mind but all those people whose livelihoods depend on our inflated housing market - construction workers, real estate agents, and the financial industry. Real estate accounted for a whopping 40% of all new jobs created in California last year.
What's the message in all this? It isn't "don't buy a house." It is, "don't buy one you can't afford and don't finance it with funny money."
Ginger Rutland writes for the Sacramento Bee Opinion pages.