No panic on housing slowdown

The Sacramento Bee reports:

In October 1990, local real estate leader Michael Lyon heard a sound he has never forgotten. It was the silence of phones that had abruptly stopped ringing.

Sacramento's sizzling 1980s housing boom was over, and the 1990s bust had begun. When it finally ended, it set records for the number of homes for sale, and flattened prices in Sacramento and Yolo counties for eight years.

"It was ugly," said Lyon, head of Lyon Real Estate.

The region's housing market is stalling again.

After an even more remarkable seven-year housing boom, the slowdown is driving up resale inventory and triggering speculation about an uncertain future. But this sagging market isn't much like the 1990s version. Some analysts say the reasons help explain why the present downturn may be shorter and less severe.

The differences between that market and this one?

"We are having job growth. We are having population growth. We're still having in-migration from the Bay Area," said John Schleimer, a Roseville-based consultant for the home-building industry.

But there's one big problem.

"The prices got too high," he said. "When we cracked $500,000 for the median, we outstripped the ability of peoples' incomes to pay."

The Bee wants to make you feel like "it's different this time".Hope springs eternal.