We have seen a significant drop in prices specifically in areas that had the largest growth areas in the 2005-2007 timeframe. These were a lot of newer neighborhoods with many focused in developments of Rancho Cordova, Elk Grove, Roseville and some small pockets of homes. But just because they were where the prices dropped the most, they may not be the best choices for the investment market.
It really depends on your investment strategy. Some want to purchase in non-owner occupied areas, where there is a large rental population. Others might prefer to buy in established owner occupied neighborhoods. Some have preferences on 'no pool', or size of home, lot size, etc.
I think that to give you more information, it might be worthwhile to discuss with you your investment objectives so that we could recommend the areas most fitting those.
My advice to you is to interview a few agents who have successfully worked with investors and choose the one that you feel the best about. I think people put too little creed into their "gut feeling" about people.
Check out my website for current market information just posted this morning for information to educate yourself about the Sacramento market.
Keller William Realty
KW RandD Investors