Due to the fact that for quite a few years now, the prices in the larger Sacramento area have been rising, Sacramento is one of the finest examples of a buyers market in the whole of the United States. And houses don’t stay on the market for too long either. One of the biggest things that this real estate market has going for it is the fact that every year, more and more Bay Area residents are looking to move to the Sacramento area. There is a big gap between the prices in those two areas and the prices in Sacramento are that much more affordable, or according to some real estate experts realistic or reasonable.
According to our research, the average price of a home in this part of the US could rise between 6 and 10 percent. But that doesn’t mean that there will be fewer sales. It is in fact, quite the opposite. In 2021 experts are predicting almost a 20% rise in the number of sales in the Sacramento Real Estate market. One of the biggest raisers in terms of pricing are family homes, single-family homes to be exact. Just in January of this year, 2021, prices of family homes have increased by almost a fifth of the previous average price. This means that if you want to invest and buy a family price in Sacramento you are probably looking at a price tag of around 460 thousand dollars.
While the number of sales is steadily increasing, the number of buyers is increasing at a far higher rate. With the amount of pressure the buyers are experiencing and are projected to experience throughout this year, the price of the average family home in Sacramento will surely rise. This is great news if you are looking to sell a property in this part of the country. You are guaranteed at least a few potential buyers who will compete and drive the price of your property up, maybe by 15% or more. The biggest proof of how hot this real estate market is the change in the average time a property sits on the market. Before, an property in the Sacramento real estate market would sit and wait for the best offer for 2 and a half to three months’ time. Just last year that has drastically decreased. If you are selling a property you will probably have it on the market for a month and a half to two months tops.
The State of the Sacramento Real Estate Market
As we have already noticed, the price of homes and other real estates in this part of the US is raising. Judging by the current state of things, those trends should not change in the foreseeable future. This means that the current average price of a home in Sacramento, which is around 400 thousand dollars will surely increase in the coming months. THe price of a square foot in Sacramento has raised above 250 dollars. Some real estate experts think that by the end of this year that price might be close to 300 dollars. Others are less optimistic, but they still agree that the price will rise. In their prognosis, the price of a square foot for a home in Sacramento could be as high as 275 or 280 dollars.
As in other parts of the economy and sales, there isn’t an endless pool of property from which you can pull from. Buyers who are looking to invest in the real estate market have to act soon. Not only are the prices raising but the average number of available properties is also decreasing day by day.
Here are some of the most important facts about the changes in the Sacramento real estate market and how they will impact the future of the market:
- When compared to 2020, the sales have gone up close to 12%
- The average price of a home in the first months of 2020 was around 380 thousand dollars
- At the beginning of this year, the price was close to 450 thousand dollars.
- This trend should continue and you should see a rise in the price of the average property by at least 15% this time next year
- The inventory has almost halved in a span of a year.
- The inventory is set to decrease by a steady rate of 2% per month until the end of the year.
What Will Change in the Sacramento Real Estate Market in 2021?
We have already mentioned that this real estate market is the hottest place to sell property in the US. But will this trend increase? Or will the pandemic, which seems to be neverending on this point, impact the market like it has impacted everything else in the last year or more. The short answer is that the market should continue to be sellers’ paradise. Based on the newest predictions, the market should increase by nearly a quarter. What we mean by that is by the end of this year, the average prices of the houses in this metro area should be 25% more expensive than that they are now. But those increased prices will not decrease the number of sales. According to the newest studies, the number of sales should aslo increase by at least 20% of what they were in the last year. For the last 8 or nine years, Sacramento has seen the steadiest increase in housing prices, and that trend should continue throughout this year as well.
The amount of change won’t be the same in every part of the Sacramento County and metro area. Both the county and the metro area that also includes Roseville and Arden should see an increase in the values of houses by around 11%. Houses that are situated in the city of Sacramento itself should see a bit more of a bump with the increase projected at close to 13% this year. When we look at the last seven years we can see a steadily rising curve. In a matter of fact, the prices of houses and homes in this part of the United States have been steadily, and surely, increasing for the last 75 months in a row!
So what does all that mean for the Sacramento real estate market in the year 2021?
It means good news for sellers essentially. They will, if they are looking to sell, probably be able to up the price by pining a couple of buyers one against each other. This is bad news for buyers. Another bad factor for buyers is the steady decrease in the number of available commodities. If you are looking to invest in such a form of property in the Sacramento real estate market, you would be wise to act fast. The more you wait, the fewer options you will have, and it will surely cost you more. Fewer properties mean more competition and higher prices. Another good factor for potential buyers is the mortgage rate. in most cases, you are looking at a mortgage rate lower than 3 percent, in the case of a 30-year mortgage.
How the Pandemic influenced the Sacramento Real Estate Market
We have touched upon this previously. At first glance, it would appear that Covid didn’t impact the Sacramento real estate market heavily. But in this part of the article, we will take a closer look at just how this global deadly pandemic has changed the way people approach buying and selling their properties in the larger Sacramento metro area.
First, let us look at some of the facts of what Sacramento is and what its pros and cons are in the estate market. Sacramento is one of the biggest cities in California, also it’s capital. The population in the area is around 500 thousand. When we look at the divide between renters and homeowners, it is close to 50/50. But in the last few years, that has shifted a bit. Currently, there are around three percent more renters than homeowners in the capital of California. In other words, 53% of residents in the city and metro of Sacramento are renters. The remaining 47% are homeowners.
The vast majority of the Sacramento homes that are being rented or sold are family houses, with three or four bedrooms. it is estimated that 3 out of 5 housing units in Sacramento are those types of houses. other types of available houses are houses that have been remodeled into apartments and rowhouses. The number of single-family houses is on the rise. Just in 2018, there were close to 2,500 new housing units built, mostly three or four-bedroom single-family houses.
The covid pandemic did leave its mark on the Sacramento real estate market. In the first few months of the epidemic, when the first real wave of the pandemic hit the USA, there was a large drop in sales. From March to May last year, the drop was a jaw-dropping 40%. In other parts of the country that might not be such a shock, but the Sacramento real estate market was a steady grower for over 5 years. Overall, 2020 saw a decrease in sales. Compared to 2019, there were over 30 percent fewer sales. That also impacted the number of sellers. COmpared to 2019, in 2020, there were around 15 percent fewer properties on the market on average in a given month.
But from May on, the number of sales started to increase. June was the first month where this real estate market was looking like its old self. In July, for example, the sales were up almost 20% when compared with the numbers in June of the same year. That trend continues, the housing market bounced back and it will continue to grow in this coming year.
Reasons Behind the Wellbeing of the Sacramento Real Estate Market
In this final part of the article, we will look deeper into the town itself, the trends, and why we think Sacramento is a well of real estate market.
1 For years now, it is one of the healthiest housing markets in the country
There is a lot of overhaul in people in Sacramento every year. People emigrate and immigrate into the town. But, most importantly of all, it is seeing a steady growth in population. In the last 3 years, the population has been growing between 1 and 2 percent yearly. This means that every year there are more and more people who might be willing buyers. This trend is looking to continue in the next few years as well, especially from all the people from the Bay Area moving to Sacramento.
2 It offers a unique combination of cheap and quality life
While you might not land a tech job that will give you more than quadruple the average wage, Sacramento still offers a lot to its residents. When we compare the prices of living in Sacramento to that those of its neighbor cities on the coast, it’s no contest. Living in Sacramento is a lot less expensive than living in Los Angeles for example. Sacramento is also a lot closer to a water source than other places in California. In the last few years, there have been more and droughts in some parts of Los Angeles. Those droughts result in water shortages in places like Los Angeles.
There are also a lot of attractions in the city. There is a fun and exciting combination of nature and modern. For example, Sacramento offers stunning hot air balloon rides, white water rafting. The NBA is one of the most popular sports leagues in the world. Sacramento has its very own team, the Sacramento Kings. While still in a rebuilding situation from most the team features one of the most electric and exciting young players in De’Aaron Fox. In the coming years, the young core of the team, with Fox, Hield, and Haliburton could be one of the most fun sporting experiences in American professional sports.
Here are a few other reasons:
- Offers a lot of quality, high paying, diverse jobs especially with General Contractor Sacramento companies.
- If you invest in the Sacramento real estate market, you could turn your property into a steady income by renting it to young couples or students.
- If you are looking to invest, the wisest part of town to invest in would be Elmhurst and Land Park.