When most people think about the housing market in California, they immediately think to stay far away. However, this year the average median home price has fallen, and things are only looking better, especially in Sacramento, and if you don’t invest now you might just miss out.
In California widely, only 33 percent of the population can afford a home. However, in Sacramento alone, this statistic rises to 44 percent. Between August and September of 2019, single-family homes, condos, and townhomes prices all dropped by almost 2 percent. However, although these overall rates are dropping, many people in California still can’t afford the mortgage payments meaning they’re continuing to turn to renting options. Many people see the impossibility of ever buying a home in the big cities, so they turn to less populated areas such as Sacramento to begin to settle down, looking for cheaper rental options. With a beautiful coastal climate, economic growth, growing healthcare access, a great education system, and an ever improving transportation system, more and more people are being attracted to Sacramento.
There has been a higher volume of sales production in Sacramento, making it easier to find places to invest. In the bigger cities, there’s not many more options for places to build properties. However, the housing market in Sacramento has been able to meet buyer demand and keep a steady volume ready to be sold. The population is also expected to grow four percent within the next three years, with a job growth of about five percent in the next two years, creating a guaranteed population of new renters.
Sacramento’s rental vacancy rates have been falling steadily over the years, while the demand has continued to increase. This has led the gross rent prices to increase as well, causing for a cash in cash return of over 90 percent. This means real estate investors have been seeing steady profits and creates a stable investment market.
Although Sacramento is a great place to invest now, it’s also important to invest quickly. The median home price is expected to begin to see a slight increase in the next year. This means you should start looking sooner rather than later on where to buy and how to invest. In 2019, Gardenland, Campus Commons, and West Tahoe Park all saw a traditional cash on cash return of two percent, and an even larger cash on cash return with Airbnbs.
In conclusion, California may not be so out of reach as you might think. Median home prices have fallen considerably, making many real estate properties liable options for investors. With Sacramento’s growing population and increased sales production, this is a great place to get your foot in the door and begin to see your investments pay off.