Sacramento real estate market could recive 1-2 punch as Gov.Schwarzenegger signs order that will lower the salaries of over 200K workers to just under $7hr.

California Governor Arnold Schwarzenegger signed a historic executive order today that could cut 1000's of jobs state wide and reduce the salaries of over 200k state workers to the minimum wage. How will this possibly affect the Sacramento area real estate market? Simple Sacramento is the state capitol and holds the largest number of state workers.

Imagine making over 60k a year and have that cut to just under $7 an hour. A spokes person with the California Budget Project stated that Sacramento stands to be hit hard by this decision.

While the Sacramento area has seen good activity and some positive numbers in homes sales the area is far from being fully recovered. I recently spoke with a colleague who works with one of the major commercial brokers for the area and told me that leasing activity for commercial property is very stagnant and in some parts practically dead. Many projects in the area at a total stand still.

Put all this together and the area is on thin ice. Many of these state workers are keeping the down town area restaurants open, but should these folks stop coming well you know what will happen costing even more jobs in the area.

The order would be cancelled if the state passes a budget by next month but that is very questionable. The Sacramento valley housing market is actually very strong in some pockets and commercial real estate although slow is offering some good buys leaving room for some progress but as a whole this action could deliver a one two punch to the slow recovery.

Unusual Commercial Loans.com