Are you looking for a new home in Sacramento this year? This west coast city has experienced steady growth over the last decade and is expected to grow at a similar rate in the next few years. In fact, according to the U.S. Census Bureau, the population of Sacramento County grew by 2.2% between 2010 and 2016. As a result, the number of households in the area increased by 3.4%.
Sacramento real estate prices have been rising steadily since 2008 and the housing market is hot. According to the latest data from Zillow, the median price of homes in the region was $534,000 in 2017. That’s almost double the average price of $300,000 recorded in 2007.
2022 Sacramento Real Estate Market Trends
Single-family houses are the most common type of property sold in Sacramento. These properties account for over half (53%) of all sales in the past five years. Single-family properties were also the most popular choice among buyers as they represented 67% of all transactions.
Apartments and condos made up the second-largest group of residential properties sold in Sacramento County. They account for about one out of every four (24%) residential properties sold during the same period. However, their share of total sales dropped by 1.9% compared to the previous year, while the share of single-family homes rose by 0.7%.
While apartments and condos are typically smaller than single-family homes, they are attractive to young professionals and retired couples alike.
2022 Median Home Price In Sacramento
According to the latest data from CoreLogic, the median price of a single-family house in Sacramento County reached $1 million in 2018. This price point represents an 8.6% increase compared to the prior year.
It is worth noting that the median price of a home in Sacramento County is significantly higher than the national average. For example, the national median price of a single-family house was $253,600 in 2018. In 2022, that median home price has increased to $270,900.
2022 Sacramento Rental Market Growth
The rental market has seen a steady growth rate since 2012, but it’s not expected to keep pace with the overall population growth in the area.
As the demand for apartments continues to rise, so does the supply of vacant units. Currently, there are approximately 7,700 apartment units available for rent in Sacramento County. This year, however, the number of available apartment rentals is expected to drop by 6.5%, leaving renters with fewer options in Sacramento County.
In addition to vacancies, another factor contributing to the decline in rent availability is the high construction cost. According to the latest report from the California Department of Finance, building costs in the state averaged $1.4 billion per month in 2018. This cost is near twice the amount spent on building projects in 2013 ($800 million).
To attract developers, Sacramento County offers generous tax incentives. The county provides a 50% tax reduction for new commercial developments that create at least 20 jobs. Additionally, the city of Davis offers a similar incentive program for new businesses that invest at least $2 million in capital improvements.
Supply Chain Issues Affecting Construction in 2022
Construction activity in the region is expected to slow down considerably over the next few years. This slowdown is mainly due to the lack of skilled labor and materials.
Currently, the unemployment rate in Sacramento County stands at 3.8%. Many people have left the workforce and are no longer looking for work. On top of that, the current jobless rate is lower than the national average. As such, the pool of potential workers is shrinking.
Additionally, the shortage of qualified tradespeople contributes to the slowdown in construction.
Another issue facing builders is the shortage of materials. The recent wildfires caused significant damage to lumber yards and warehouses across the region. As a result, the cost of building supplies increased substantially.
2022 Population Projections
According to the U.S. Census Bureau, Sacramento County is projected to grow by 1.9% between 2017 and 2022. The total population in the county expects to reach 546,000 by 2022.
This population growth projection represents a slight increase compared to the last census count (546,000), but it is still below the historical trend. Over the past decade, the county’s population has grown by 9.7%.
Sacramento Real Estate Market Trends
Real estate trends can change quickly, especially considering how fast technology advances.
However, here are some of the most important real estate trends for the Sacramento area:
• Home prices continue to climb. The median sales price of a single-family home in the county increased by more than 11% during the first half of 2019. Housing prices hit an all-time high of $845,000 (median price).
• Strong demand for rental properties. Vacancies are low, and rents continue to go up. For example, the average monthly rent for a one-bedroom apartment in Sacramento County rose by 2.6% between January and June 2019.
• Millennials are moving into the area. More young adults live in the area because they want to stay close to their families. Also, most prefer living near public transportation options like BART or AC Transit buses.
• New development continues to boom. Developers are creating mixed-use communities with everything from apartments to retail space. These products offer residents various amenities, including grocery stores, restaurants, parks, schools, and other community services.
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