Market Update: Why Home Prices Keep Hitting the Sky So, you've noticed home prices are…
As the pandemic drove a migration trend across the United States, the greater Sacramento area has welcomed many new residents, primarily due to its lower cost of living compared with the Bay Area.
It’s not that the city isn’t expensive—it’s just that it’s much more affordable than its costly Northern California neighbors.
With more work-from-home and hybrid employment options, people have started fleeing San Francisco and San Jose, looking to get more bang for their real estate buck. In fact, moves from San Francisco County to Sacramento County jumped by 70% in 2020, according to a CBRE report.
Even though California’s total population declined for the first time in history—with more than 182,000 residents moving out in 2020—the Sacramento area’s population increased, with 12,750 newcomers.
What’s Driving the Sacramento Housing Market?
Why are people choosing to move to the Sacramento region?
For starters, it’s a two-hour drive to San Francisco or San Jose, which is not bad for remote workers who need to make the occasional office visit. For those who are job-seeking, Sacramento offers many career opportunities.
And last but certainly not least, home prices and rents are much more accessible compared with the pricey Bay Area. Sacramento has become one of the most popular places for buyers seeking bigger homes at better prices.
The area’s real estate market has performed well in the past year as buyers search for more reasonably priced housing. Sacramento home prices are expected to grow by 5%, and home sales by 6% year over year in 2022. There’s no doubt that Sacramento is one of California’s hottest housing markets right now.
According to NeighborhoodScout.com, Sacramento has had some of the highest home appreciation rates of any community in the nation over the past 10 years. Its real estate appreciated 200.19% over the past 10 years, which is an average annual home appreciation rate of 11.62%, putting Sacramento in the top 10% nationally for real estate appreciation.
If you’re a homebuyer or real estate investor, Sacramento has a track record of being one of the best long-term real estate investments in America.
Real Estate by the Numbers
According to Realtor.com, here are the April 2022 real estate stats for Sacramento County:
- The median listing price was $540K, trending up 16.1% year over year.
- The median listing price per square foot was $340.
- The median home sold price was $550K.
- Homes sold for 3.45% above asking price on average.
- On average, homes sell after 37 days on the market.
At the time of this writing, there are 3,932 homes for sale in Sacramento County, 665 of which were newly listed within the past week.
Where to Buy a Home
For first-time homebuyers, “affordability” and “Sacramento” aren’t often used in the same sentence. However, areas like South Sacramento have single-family properties available for less than $400K.
If you want to search for single-family homes in the region that are listed for less than $400K, there are two different markets you’ll want to look at.
The first one is South Sacramento, which currently has 79 listings in the $300K to $400K range. South Sac is the area east of Highway 99 but west of Power Inn Road, which is a long road that cuts all the way through South Sacramento up to North Sacramento.
Watch this video where Aaron and Jennifer of New Way Mortgage discuss South Sacramento’s neighborhoods and homes for sale.
North Sacramento is another area where you can find over 100 listings for affordable single-family homes in the $300K to $400K range. While some of these properties might not check every single box on your list of desires when home shopping, they can still get you into this market.
Remember, home appreciation here is high. So you may consider buying a starter home and then taking advantage of your increasing home equity to upgrade to a bigger house down the road.
If you’re looking to buy in today’s market, keep in mind that becoming a homeowner gets you in the game of real estate appreciation. Then there are all the other advantages that come with homeownership, like tax write-offs, enjoying a stronger sense of community, and more.
Of course, when looking at homes in any location, it’s going to come down to schools, amenities, and all the other considerations that are a must-have for you as a homebuyer.
Watch this video, where Aaron and Jennifer break down the affordability in North Sacramento.
If you’re considering buying a home in the greater Sacramento area, the team at New Way Mortgage is here to help with all things mortgage and your real estate purchase. Give us a call today at 916-465-6639.