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Sacramento Housing Market: A Goldmine for Real Estate Investors

Alt tag: Sacramento real estate market trends The Sacramento housing market has been on a steady rise, thanks to its affordability compared to its neighboring cities like San Francisco and San Jose. The increase in...

Sacramento real estate market trends Alt tag: Sacramento real estate market trends

The Sacramento housing market has been on a steady rise, thanks to its affordability compared to its neighboring cities like San Francisco and San Jose. The increase in demand and local home values has created new opportunities for real estate investors.

Sacramento Real Estate Market 2022 Overview

  • Median Home Value: $475,136
  • Median List Price: $624,667 (+5.1% year over year)
  • 1-Year Appreciation Rate: 20.9%
  • Median Home Value (1-Year Forecast): 15.8%
  • Weeks Of Supply: 4.5 (-0.3 year over year)
  • New Listings: 381 (-19.9% year over year)
  • Active Listings: 1,960 (-20.3% year over year)
  • Homes Sold: 490.0 (-5.2% year over year)
  • Median Days On Market: 12.3 (0.0 year over year)
  • Median Rent: $2,228 (+12.5% year over year)
  • Price-To-Rent Ratio: 17.77
  • Unemployment Rate: 4.4% (latest estimate by the Bureau Of Labor Statistics)
  • Population: 1,552,058 (latest estimate by the U.S. Census Bureau)
  • Median Household Income: $67,151 (latest estimate by the U.S. Census Bureau)

Sacramento Housing Market Forecast 2022

As the capital of California and with its close proximity to other major cities, the Sacramento real estate market is thriving. The pandemic has led more people to work from home, giving them the freedom to explore more affordable options like Sacramento. The demand is expected to drive prices even higher, potentially reaching a 15.8% increase over the next 12 months.

Inventory constraints are also affecting the rental market. With a price-to-rent ratio of 17.77, renting a home is a more affordable option. However, the lack of listings has limited the options for buyers, driving up rental demand and allowing landlords to increase rental rates.

The forecast for the Sacramento housing market is an increase in home values due to low inventory levels and growing demand fueled by historically low interest rates.

Sacramento Real Estate Market Trends 2022

The current trends in the Sacramento real estate market are primarily influenced by supply and demand dynamics. With lower borrowing costs, there is a growing demand for homes, leading to a shortage of inventory. The impact of COVID-19 has further exacerbated this issue.

The pandemic initially halted real estate activity, but it quickly rebounded due to low-interest rates and improving economic conditions. However, the limited inventory remains a concern.

Supply and demand imbalances will continue to drive up home prices in Sacramento. While builders are working to alleviate the stress on inventory, it will take time before more homes are brought to the market.

Sacramento Real Estate Foreclosure Trends 2022

Foreclosures in Sacramento have seen a significant decrease in recent years, primarily due to government intervention during the pandemic. However, as government assistance expires, delinquencies are expected to rise, leading to an increase in foreclosures. Real estate investors should be prepared to secure deals and help distressed homeowners.

Some neighborhoods to consider for foreclosure investments in Sacramento are East Sacramento, Parkway, South Natomas, Meadowview, and Pocket.

Median Home Price In Sacramento 2022

The median home price in Sacramento is $475,136, making it relatively affordable compared to the rest of California. However, home values have increased by 20.9% in just one year. The proximity to San Francisco and San Jose has contributed to the rise in prices as more buyers seek affordable options outside of these cities.

With less than two months of available inventory, home prices in Sacramento are expected to continue rising, potentially increasing by 15.8% over the next year.

Sacramento Real Estate Investing 2022: Should You Invest?

The Sacramento housing market presents great opportunities for real estate investors, especially with the influx of buyers from more expensive cities seeking affordable alternatives. While home prices are increasing, the demand and competition continue to drive the market.

Rehabbing properties may still be viable, but long-term rental properties are increasingly attractive. Rental properties provide cash flow and offset the higher prices. With historically low interest rates, borrowing money has never been cheaper, allowing investors to save on mortgage obligations and increase cash flow.

Sacramento's rental market is expected to grow as more people move from nearby cities. The city offers amenities and a diverse job market, making it an attractive location for renters and investors alike.

Some of the best neighborhoods for rental properties in Sacramento are River Park, Pocket, and Westlake, which exhibit high demand, low unemployment rates, and relatively high income levels.

In conclusion, the Sacramento housing market is thriving, driven by increasing demand and limited inventory. Real estate investors should consider the opportunities presented by the city's affordability and potential for growth.