boom and bust in sacramento

Sacramento Housing Bust Led to the Collapse of the Stairway to Heaven

I once committed what some people consider to be a sacrilegious act. This unforgivable thing happened in 1976. I was living in a cramped apartment across the street from the ocean on Balboa Boulevard in Newport Beach, California. Many Friday nights were party nights. You younger kids might not believe this, but people used to gather at each other’s abodes, play records on a turntable and talk face-to-face, to each other, pre-cell and pre-computer era.

One Friday night were all sitting around, chatting, doing whatever we used to do with incense and whatnot, and listening to Stairway to Heaven, by Led Zeppelin. I asked my roommate to change the record. She refused. And that’s when it happened. You know how sometimes you just can’t stand to hear that song one more time? Maybe it’s a song that reminds you of a bad relationship, or an awful time when you were in high school or maybe it just doesn’t stand up to the arduous task of still being enjoyable after playing it over and over and over like, oh, I dunno, like the grating Honey by Bobby Goldsboro, for example.

Robert Plant, I can’t listen to you anymore. Just can’t do it. I went over to the record player, snatched the record off, opened my front door, walked out into the street and spun the album like a Frisbee into the center divide of Balboa Boulevard. Friends mouths agape. That was all I could take of Stairway to Heaven. There are people today who still do not forgive me for that act of treason. There are some who are very upset that I had the nerve this morning to compare Led Zeppelin to Bobby Goldsboro.

The Sacramento Bee has an interesting story this morning about 36 years of boom and bust in Sacramento, beginning in 1976. I was in the real estate business in 1976, working as an escrow officer. You could do no wrong in real estate back then. Why, you could buy a perfectly nice home in Orange County for $80,000, finance it with a second straight-note of no payments, hold on to it for 3 years and pocket ten grand, even after paying off 3 years of compounded interest.

The piece talks about peaks and valleys of the Sacramento real estate market over 36 years to present. It says the most recent boom ran from 1997 to 2006, and that’s about right. What I didn’t realize was after adjusting for inflation, that increase amounted to 135% — as compared to about 50% for the rest of the country. But after all is said done, Sacramento housing prices increased just 33%, or about 1 percent each year from 1976 to 2012.

It also made me think of Led Zeppelin. The Bee reporter Sangree quoted a source as saying “people thought housing was the stairway to heaven,” talking about that last boom. It’s true, they did. Everybody thought prices would never crash. I guess the question is will history repeat itself? Sure. But it’s not likely in my lifetime. Moreover, do I regret smashing a Led Zeppelin album in the street? Nope.

Photo: Shutterstock

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