By Jim Wasserman, The Sacramento Bee, Calif.

Oct. 3--The hyperbole soared into overdrive when Gov. Arnold Schwarzenegger signed a major "anti-sprawl" bill this week authored by state Sen. Darrell Steinberg, D-Sacramento.

The governor called it the biggest revision of land-use law since 1970's California Environmental Quality Act. Forecasts abounded about a new emphasis on high-density housing near transit stops.

But in Sacramento? Don't look for an end to suburbs and single-family homes in popular school districts. While the thrust of SB 375 is toward "infill" housing in bypassed urban corridors, suburban real estate will still be king, say some who tracked the bill.

"You can't do it on infill. It doesn't matter what anyone says. You can't do it," said Dennis Rogers, vice president of the North State Building Industry Association, the region's homebuilder trade group.

He said building trends might change some in suburbs. But the population will still grow and the number of households will, too. "You won't keep up with that with infill," he said.

Homebuilders supported the bill, which has the reduction of traffic to curb greenhouse gases as one of its major goals. The bargaining won them a key goal: less interference from CEQA lawsuits that are often used to stop infill projects.

Yet the impact on the area's growth pattern will likely be modest, said David Mogavero, a Sacramento architect and infill builder. Mogavero said expensive gasoline will be a far bigger factor than SB 375 in driving city-focused growth in years to come.

A new player steps in

Who can blame homebuilding giant Pardee Homes of Los Angeles for feeling cursed by Northern California?

Its third try to build houses north of the Tehachapis is so tough the company finally unloaded 637 unbuilt home lots in Natomas rather than ride out this market any longer.

Pardee's Natomas Meadows, which opened to fanfare in June 2007, closed five months later. Last week Pardee surrendered entirely. It sold eight model homes and 100 empty acres to Roseville-based Granite Bay Development, a firm with cash and no debt. Granite Bay says it will sell lots to builders in two or three years when the Natomas levees are fixed and the market rebounds.

Though the price was undisclosed, it's not hard to guess it was something of a haircut. Pardee bought the land in 2004 at the height of the Central Valley residential land boom. It sold in a trough.

Granite Bay Development is a relative newcomer to Sacramento, established in 2002. Managing Partner Clay Loomis is a former engineer with Seattle-based developer Triad Associates. Its senior project manager is David Ragland, a 20-year homebuilding executive in Sacramento. Six months ago he left the capital division he formed for Pardee in 2004 and joined Loomis.

"We're looking to make other acquisitions in the greater Sacramento area and into Nevada," said Loomis. "We think we've estimated where the bottom is. We think it will go a little lower and it might overcorrect a little bit."

Pardee dipped its toes in the Bay Area in the 1970s and left. It tried again in Livermore in 2005, but voters rejected its plans for 2,450 new homes. Then it tried Sacramento.

The firm is holding onto land it bought in 2004 for 1,100 houses in Rancho Cordova's Sunrise-Douglas area and 2,200 homes in Stockton. It's also still building a 135-unit apartment complex at Natomas Meadows.

Income and home prices

Everybody knows that houses in the area have gotten way more affordable after they flew too high. Sacramento Regional Research Institute economist Suzanne O'Keefe can explain exactly what's happened.

In a speech earlier this week at the Sacramento Association of Realtors, O'Keefe offered the definitive brief history of area home prices. Listen in:

"From 1990 to 2000 people would buy a house about three or four times their annual salary," she said. "And that was also true in the year 2000. You take your income and multiply it by three or five, or take the median income for the region and multiply it by three or five and you get about the average home value.

"But during that housing bubble from 2000 to 2007, this ratio was out of synch with where it's been in the past," O'Keefe said. "It went way up in Yolo County to almost nine. This number was high across the region. The lowest was Sutter County, six and a half."

What now in 2008?

"Based on the numbers that are coming out now in terms of home sales prices for this year, May 2008 to August 2008, they're getting close to that four to five range. To me, that indicates we're getting back to where house prices are at a point where people can afford them with the median income here in this region."

The question now is will they buy? Many have apparently stopped looking recently, said Folsom building industry consultant Greg Paquin. He noted reports from homebuilders that visits at model home sites have dropped seriously the past two weeks as the White House, Wall Street and Congress raise threats of economic calamity during negotiations on a rescue package.

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