Nestled in the Central Valley region of California, Sacramento County boasts a thriving and dynamic housing market. As one of the most populous counties in the state, it offers a diverse range of opportunities for homebuyers and investors alike. In this blog post, we will delve into the housing market report for Sacramento County, exploring the median sold prices and sales figures for existing single-family homes, shedding light on the current state of this significant housing market in the Central Valley.
Sacramento County: A Central Valley Gem
Sacramento County is a vibrant and bustling area that serves as the heart of the Central Valley region. With its rich history, vibrant culture, and strong economy, it has attracted an influx of residents seeking a high quality of life and excellent opportunities. The county’s strategic location, excellent transportation links, and numerous amenities have contributed to its popularity among both local and out-of-state homebuyers.
Understanding the housing market trends in Sacramento County and the broader Central Valley region is crucial for potential buyers and sellers to make informed decisions. Let’s delve into the latest data for August 2023 and analyze the trends in median sold prices and sales to address important questions about the current state of the real estate market.
Sacramento County Housing Market
According to the California Association of Realtors®, in August 2023, the median sold price for existing single-family homes in Sacramento County was $535,000. Compared to July 2023, this indicates a decrease of 2.2%. However, when compared to August 2022, the prices have remained relatively steady, showing a marginal year-over-year change of 0.0%.
Regarding sales, there was a notable month-to-month change with a 7.7% increase. However, year-over-year, sales have witnessed a significant decrease of 19.1%, reflecting the dynamic nature of the real estate market.
Central Valley Housing Market
In the broader Central Valley region, the median sold price for existing single-family homes in August 2023 was $485,000. This reflects a month-to-month decrease of 0.8%, and a more significant year-over-year increase of 3.2% compared to August 2022.
Regarding sales in the Central Valley, there was a month-to-month change of 4.0%, illustrating a positive trend. However, similar to Sacramento County, there was a substantial year-over-year decrease of 19.0% in sales.
Key Questions Answered
Are Sacramento housing prices going down?
While there was a slight month-to-month decrease of 2.2% in the median sold price for Sacramento County, the year-over-year change remained negligible at 0.0%. This suggests that housing prices in Sacramento are relatively stable and not experiencing a significant decline.
Is now a good time to buy a house in Sacramento?
Considering the stable median sold prices and a 7.7% month-to-month increase in sales, this could be a favorable time for potential buyers in Sacramento. The market appears active, and buyers might have opportunities to explore and secure properties.
The above stats show that the housing market in Sacramento County and the Central Valley exhibits distinct trends. While Sacramento’s median prices have remained relatively stable, the Central Valley has seen a moderate increase. Understanding these trends and consulting with real estate professionals can guide prospective buyers and sellers in making well-informed decisions in the current real estate landscape.
Single Family Homes in the Sacramento Housing Market
The Sacramento housing market for single-family homes in August 2023 shows some interesting trends, with a decline in sales volume and no change in the median sales price. Let’s take a closer look at the key statistics provided by the Sacramento Association of REALTORS®.
Median Sales Price and Sales Volume
The median sales price for single-family homes in Sacramento remained relatively steady, showing a 2.2% decrease from $547,000 to $535,000 compared to the previous month. Importantly, this figure remained the same as in August 2022. Sales volume, on the other hand, saw a 7.9% increase from July, totaling 979 sales. However, there was a 17.2% decrease in sales compared to August 2022.
Sales Price Composition
Breaking down the sales price composition, conventional financing constituted 60.8% of the sales, while cash and FHA accounted for 18.9% and 14%, respectively, this month.
Listing Inventory and Months of Inventory
Listing inventory slightly increased by 0.9% from July to August, reaching 1,278 units. However, when compared to August 2022, there is a significant decrease of 46.3%. The months of inventory, a crucial indicator, increased from 1.3 Months to 1.4 Months, illustrating the amount of time it would take for the current rate of sales to deplete the total active listing inventory.
Days on Market
The median days on market (DOM) increased slightly from 8 to 10, down from 17 in August 2022. Of the 979 sales this month, 77.9% were on the market for 30 days or less, and 92.8% were on the market for 60 days or less.
Summary
The Sacramento housing market in August 2023 shows a slight increase in sales volume but a decrease in median sales price. Limited inventory, down by 46% year-over-year, remains a significant factor. It’s also noteworthy that the average price per square foot dropped marginally from $344 to $343, indicating a nuanced market scenario. Buyers and sellers need to consider these statistics to make informed decisions in this dynamic real estate landscape.
Sacramento Housing Market Forecast 2023-2024
The Sacramento housing market has experienced fluctuations over the past year, with changes in home values, market forecasts, and key market indicators. Let’s explore the current state of the market and the forecast for the near future.
Sacramento-Roseville-Arden-Arcade Area: An Overview
The Sacramento-Roseville-Arden-Arcade area encompasses multiple cities in Sacramento County, known for its diverse communities, cultural richness, and a blend of urban and suburban living. The region boasts a strong economy, educational institutions, and ample recreational opportunities.
Now, let’s focus on the housing market within this area.
Key Housing Market Statistics
The average home value in the Sacramento-Roseville-Arden-Arcade area stands at $565,904, representing a 6.6% decrease over the past year. Notably, homes in this area typically go to pending in approximately 10 days, indicating a swift market turnover.
Zillow’s 1-year market forecast as of August 31, 2023, predicts a growth rate of 2.5% in the Sacramento-Roseville-Arden-Arcade housing market. This forecast is crucial as it suggests a potential shift in the market dynamics and informs prospective buyers about future trends.
Market Trends and Buying Prospects
The median sale to list ratio, a key indicator of market competitiveness, was 1.001 as of July 31, 2023. This suggests that, on average, homes are being sold close to their listed prices, underscoring a balanced market.
Furthermore, data from the same period reveals that 53.8% of sales were transacted over the list price, indicating a competitive market. However, there were also 31.4% of sales below the list price, providing potential negotiation opportunities for buyers.
The median days to pending, a critical metric showing the pace of the market, stood at 10 days as of August 31, 2023. This rapid transition from listing to pending underlines the active and dynamic nature of the Sacramento-Roseville-Arden-Arcade housing market.
Implications for Prospective Buyers
For prospective buyers, this forecast suggests a potential stabilization in the market, with a modest 2.5% growth anticipated. The decrease in the average home value over the past year could present a buying opportunity, especially if this trend continues.
Buyers can leverage the competitive nature of the market with 53.8% of sales going over the list price, indicating the importance of acting swiftly and offering a competitive bid. However, with 31.4% of sales below the list price, buyers may also find room for negotiation and potentially secure a favorable deal.
Is Buying a House in Sacramento a Good Investment?
Should you consider Sacramento real estate investment? Now that you know where Sacramento is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Sacramento is a good investment. You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
Let’s talk a bit about Sacramento. Sacramento is the capital of California, though many mistakenly think it is L.A. or another larger city. Sacramento is a minimally walkable city in Sacramento County with a population of approximately just over half a million people. It is overshadowed by bigger, glitzier cities like San Francisco or Los Angeles. When you take suburbs like Yuba City, Truckee, Roseville, and South Lake Tahoe into account, the Sacramento real estate market contains around two million people. However, size isn’t reason enough to invest in any real estate market.
The rise and fall of Detroit and the current decline of other rust belt cities are testaments to this. The city of Sacramento has a mixture of owners and renters, with 47.12% owning and 52.88% renting. According to Neigborhoodscout.com, a real estate data provider, three and four-bedroom single-family detached homes are the most common housing units in Sacramento. Other types of housing that are prevalent in Sacramento include duplexes, rowhouses, and homes converted to apartments. Sacramento has more renter-occupied housing accounts as compared to owner-occupied.
Single-family detached homes account for roughly 60% of Sacramento’s housing units. Looking back in 2018 about 2,400 new dwelling units were built in Sacramento, most of them being single-family detached homes. That’s even more than San Francisco, a city of nearly 900,000 people where new towers have altered the skyline. Overall, neither Sacramento nor California produced nearly the same amount of new housing that occurred during the state’s big building boom more than a decade ago, when home construction in Sacramento peaked at 4,000 new units, city officials said.
Although this article alone is not a comprehensive source to make a final investment decision for Sacramento, we have collected evidence-based positive things for those who are keen to invest in the Sacramento real estate market. Let’s take a look at the number of positive things going on in the Sacramento real estate market which can help investors who are keen to buy an investment property in this city.
Sacramento is a Healthy Housing Market
Sacramento had several thousand people move in there in 2017. Between people relocating here from overheated housing markets and demographic momentum, it saw 1.4 percent growth in 2017 and 2018. This gives the Sacramento housing market a source of slowly increasing demand and rising property values. Yet the area isn’t experiencing a bubble that will burst down the line.
The area also has a steady enough job market that it isn’t experiencing population loss like the San Joaquin Valley due to environmental crackdowns on agriculture or the risk of a collapse like San Francisco’s tech bubble may see. This is why SmartAsset ranked the city as the third healthiest housing market in the state.
For those considering Sacramento real estate investment, median rents of around 1700 dollars a month in Sacramento don’t sound as appealing as the 4000 dollars a month in San Francisco and 3400 dollars a month in San Jose. However, Sacramento is more landlord-friendly than some of the alternatives. For example, the Sacramento housing market isn’t burdened by local rent control laws, though the state government is considering imposing it on the whole state.
A side benefit of the relatively affordable Sacramento real estate market and increasing demand is that any Sacramento real estate investment will see significant appreciation. For example, the average rental rates in the Sacramento housing market went up nearly 9 percent year over year in 2018. That was the greatest increase for any American metro area.
Among all the nation’s largest metros, the Sacramento metro area is predicted to have the highest sales and price growth in 2021. Therefore, with the affordable entry price of homes, high appreciation, and growing rent prices, real estate investors in Sacramento can enjoy positive cash flow and nice profits in the long term.
Sacramento’s Cost of Living & Quality of Life
Sacramento may not offer the $200,000 salaries of tech startups, but it doesn’t cost you more than a million dollars to buy a modest bungalow, either. Sacramento’s cost of living is much cheaper than the California coast just 75 miles away. That’s why the Sacramento real estate market being 50 percent higher than that national average is irrelevant – it is the sizzling home prices in the Bay Area that make people move here for the relative bargains. The 20 percent higher cost of living is a bargain, too, compared to the California coast.
Sacramento offers a better quality of life than the larger cities it is becoming a suburb of. We’ll ignore the fact you’re far closer to Lake Tahoe because any home in the Sacramento housing market puts you in easy reach of the outdoors. The area offers white water rafting, hot air balloons, mountain biking, fishing, and nature walks. You don’t have to buy a luxury property in the Sacramento real estate market to enjoy beautiful views or live near open spaces.
The area had its great cuisine and entertainment options before the influx of Silicon Valley types, but a livelier night scene is forming, too. A side benefit of the more affordable Sacramento housing market is that homelessness is almost nonexistent in Sacramento. You certainly don’t need a poop-reporting app to avoid the attendant health hazards while you go on your morning run.
One of the reasons to snap up a Sacramento real estate investment over one in the hotter real estate markets is that the area is safer overall. Sacramento has a slightly higher property crime rate than other big cities in cities, but Sacramento has a much lower violent crime rate. People are more concerned about being mugged, raped, or murdered than having their car broken into.
The nonviolent crime stats are also skewed due to the more lenient authorities in San Francisco and Los Angeles. When you ignore people shooting up in public and won’t punish violent panhandlers, your official crime rate is lower but that doesn’t make it better. Sacramento seeks to maintain order, public health, and safety to make it a safer place to live.
Sacramento is Bucking the Bad Trends Plaguing California
California is seeing overall population growth, but it isn’t healthy. Native-born Americans are fleeing the state for Oregon, Nevada, Arizona, and Idaho. They’re replaced by lower-skilled, lower-paid legal and illegal immigrants. This hollows out the middle class of the state while contributing to sky-high poverty rates. Sacramento is a stark contrast to these unhealthy trends. It is receiving an influx of middle-class and working-class people from around the state who don’t want to leave California.
This is why Sacramento ranked number one in the state for one-way U-Haul trips in 2018. This makes the Sacramento real estate market much healthier since it contains a true income mix. It also allows Sacramento real estate investment investors more options than luxury homes and densely packed affordable units, the only types of housing you see built in San Francisco.
People are willing to commute 90 minutes to San Francisco each way to get those Silicon Valley paychecks, though they don’t want to pay SF prices for a property. This is increasing the value of homes on the western side of the Sacramento real estate market since they’ve become a de facto suburb of the Bay Area.
While Yolo County is a rapidly developing suburb of San Francisco, the eastern side of the Sacramento metro area contains large tracts of agricultural land. The Central Valley is one of the most productive agricultural areas in the United States. This means that Sacramento’s real estate investment opportunities include agricultural land and former farmland that is open to new development.
Sacramento’s Diverse Job Market Is a Plus for Residents
San Francisco suffered a decline in the early 2000s when the first internet bubble burst. Fears of regulation and anti-trust action against Big Tech firms could cause the San Francisco area to suffer a second major decline because they’re so dependent on high tech to bolster the real estate market. Sacramento does have several high-tech jobs, many of them small firms that relocated to the area for its lower cost of living and doing business.
The government is the largest employer, and it is a stable one at that. Healthcare and construction are major employers, as well. This gives Sacramento a more stable job market in addition to low unemployment rates. Tourism and the service sector is a growing contributor, too, as people move here for the lower cost of living and have more money to spend on luxuries like going out. This contributes to the improving quality of life that will keep the Sacramento real estate market going strong.
Sacramento Rent Prices
Sacramento was on the nation’s top 10 list of rent increases in 2020. More people are moving out of big cities and heading toward surrounding areas, like Sacramento. The transition is driving rental prices up in counties like Sacramento, while rent in areas like San Francisco is going down. There is not a whole bunch of rental property inventory out there, which is driving the prices up.
As of Sept 2023, the average rent for a 1-bedroom apartment in Sacramento, CA is currently $1,545. This is a 5% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Sacramento decreased by -2% to $1,485. The average rent for a 1-bedroom apartment decreased by -2% to $1,545, and the average rent for a 2-bedroom apartment decreased by -1% to $1,850.
The Diverse Sacramento Rental Market Is a Plus for Investors
If you’re considering Sacramento real estate investment, the diverse rental market is a definite plus. Being a state capital, it is home to several universities. This allows you to rent to the relatively large student market in addition to the local population. There is, of course, the University of California campus in Sacramento, but you could own investment properties by American River College and other, smaller schools in the area, too. Around 50% of households are renter-occupied.
Best Neighborhoods in Sacramento to Buy a House
In any property investment, cash flow is gold. California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. Sacramento is an island of sanity in an overpriced, over-regulated, and overheated West Coast housing market.
It reflects the California ideal that most of the state has lost, and that’s we recommend it to investors over the “hotter” California metro areas. These are the same factors causing many Californians themselves to vote with their feet and move here instead of moving out of the state altogether.
The city remains a choice landing spot for coastal emigres tired of skyrocketing housing costs and long commutes. Sacramento is also a fast-growing city with a flourishing real estate market. Continuously developing economy, employment, and a better quality of life offer a lot of opportunities for real estate investors in Sacramento to purchase single-family homes as investment properties.
Good cash flow from Sacramento investment property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Sacramento in a growing neighborhood would be key to your success. If you invest wisely in Sacramento real estate, you could secure your future.
The less expensive the Sacramento investment property is, the lower your ongoing expenses will be. When looking for the best real estate investments in Sacramento, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.
The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Sacramento might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods.
Sacramento home prices are some of the most expensive in all of the United States. There are 89 neighborhoods in Sacramento. Midtown has a median listing price of $838.9K, making it the most expensive neighborhood. Hagginwood is the most affordable neighborhood, with a median listing price of $278K (Realtor.com).
Some of the most popular neighborhoods in Sacramento, California are Florin, East Sacramento, Midtown, Meadowview, Natomas Crossing, Arden-Arcade, North Sacramento, Elmhurst, East Sacramento, Tahoe Park, North Highlands, Natomas Park, Hollywood Park, Rancho Cordova, and South Land Park.
Elmhurst, Land Park, and Upper Land Park are some of the top neighborhoods in Sacramento to buy investment properties. These are quite affordable neighborhoods with a low entry price of homes, high cash-on-cash returns, and a positive appreciation forecast for the coming years. According to Zillow, Elmhurst home values have gone down 0.2% over the past year. Typical Home Value is $616,096 (Data through September 30, 2022).
According to Realtor.com Market Hotness Index, Elmhurst, Sacramento, CA is VERY HOT at the moment. It ranks in the top 11% of neighborhoods in the area and the top 28% in the U.S. Homes sell 5 days slower and are 23% less popular than homes in the surrounding area. In October 2022, the median list price of homes in Elmhurst was $580K, trending down 13.4% year-over-year. The median sale price was $580K. It is a seller’s market.
Land Park, Sacramento, CA is also VERY HOT. It ranks in the top 3% of neighborhoods in the area and the top 13% in the U.S. Homes sell 4 days faster and are 116% more popular than homes in the surrounding area. In October 2022, the median list price of homes in Land Park was $749.9K on Realtor.com, trending up 7.3% year-over-year. The median sale price was $750K. It is a seller’s market.
Upper Land Park is a neighborhood in the more general Land Park area of Sacramento, California. The real estate is primarily made up of small (studio to two bedrooms) to medium-sized (three or four bedrooms) single-family homes and apartment complexes/high-rise apartments. Most of the residential real estate is occupied by a mixture of owners and renters.
Upper Land Park, Sacramento, CA is also VERY HOT at the moment. It ranks in the top 3% of neighborhoods in the area and the top 13% in the U.S. It is a seller’s market. The housing supply is very tight compared to the demand for property here. In October 2022, the median listing home price in Upper Land Park was $529K, trending up 2.7% year-over-year. The median home sold price was $493.7K.
Top 10 Sacramento Neighborhoods Where Real Estate Is Going Up
Here are the ten neighborhoods in Sacramento having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
- Central Oak Park
- Woodlake
- South Hagginwood
- Norwood I-80
- Youngs Heights
- Central Oak Park East
- Midtown Winn Park Capital Avenue North
- Boulevard Park
- Old Sacramento
- Glen Elder North
We recommend taking the help of the local real estate agents to find neighborhoods with an affordable entry prices of homes, high appreciation forecasts, and growing rent prices so that as an investor you can enjoy positive cash flow and nice profits. Apart from Sacramento, you can also invest in many other real estate markets in California. California’s real estate market is the focus of many U.S. and foreign real estate investors.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your turnkey investment properties.
Not just limited to Sacramento or California but you can also invest in some of the hottest real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience with our team to see if Sacramento makes sense as a place to invest today.
We can help build you a custom portfolio of turnkey properties located in some of the best markets in the United States. By researching and structuring complete turnkey real estate investments, we can help you succeed by minimizing risk and maximizing profitability.
This article shouldn’t be used to make real estate or financial decisions. Some of this article’s information came from referenced websites. Norada Real Estate Investments makes no express or implied representations, warranties, or guarantees that the information is accurate, reliable, or current. All information should be validated using the below references. Norada Real Estate Investments does not predict the future US housing market. Buying a rental property requires research, planning, and budgeting. Not all investments are good. Always do research and consult a real estate investment counselor.
References
Market Data, Reports & Forecasts
https://www.sacrealtor.org/
https://www.sacrealtor.org/consumers/housing-statistics
https://www.zillow.com/sacramento-ca/home-values
https://www.littlebighomes.com/real-estate-sacramento.html
https://www.neighborhoodscout.com/ca/sacramento/real-estate
https://www.sacbee.com/news/coronavirus/article243805667.html
https://www.realtor.com/realestateandhomes-search/Sacramento_CA/overview
Foreclosures
https://www.realtytrac.com/statsandtrends/ca/sacramento-county/sacramento
Best Neighborhoods
https://www.homeunion.com/sacramento-ca/
https://www.neighborhoodscout.com/ca/sacramento/real-estate
Top Reasons to Invest in Sacramento
https://en.wikipedia.org/wiki/California_locations_by_crime_rate
https://realestate.usnews.com/places/california/sacramento/jobs
https://www.gobankingrates.com/making-money/economy/sacramento-vs-bay-area
https://www.thesandiegocriminallawyer.com/california-cities-most-dangerous.html
https://www.theguardian.com/business/2019/apr/29/big-tech-regulation-facebook-google-amazon
https://www.abc10.com/article/news/local/5-rent-controlled-cities-in-california/103-591256565
https://www.thrillist.com/entertainment/san-francisco/why-sacramento-is-the-new-oakland-sf
https://www.sfgate.com/bayarea/article/SnapCrap-app-San-Francisco-poop-feces-dirty-street-13281837.php
https://www.sfgate.com/expensive-san-francisco/article/uhaul-sacramento-san-francisco-moving-exodus-13509219.php
https://www.sfgate.com/expensive-san-francisco/article/sacramento-move-grass-is-greener-tips-bay-area-13164238.php
https://www.technologyreview.com/s/613628/big-tech-breakup-regulation-antitrust-apple-amazon-google-facebook-doj-ftc-policy
Rental Market Trends
https://www.rentjungle.com/average-rent-in-sacramento-rent-trends/
https://www.rentcafe.com/average-rent-market-trends/us/ca/sacramento/