Real estate is one of the many things that has changed this past year significantly due to COVID. However, for sellers, this leads to more demand for houses than seen since the 2008 Housing Crisis. The previous year alone has seen a steady upward trend in the Sacramento Real Estate Market market that gives California homeowners the upper hand.
Sacramento Real Estate is no different. The median home price increased by $55,000 from October of 2019 to 2020, going from $385,000 to $440,000. The moment a ‘for sale’ sign goes up, the property has buyers coming from everywhere. In fact, it isn’t unusual for a seller to receive multiple offers above the asking price.
This area was already considered expensive, with COVID making that fact even more apparent. But with the mortgage rates being considerably low, home sales are soaring regardless of the square foot offered. The Sacramento region has a strong demand, including Tahoe Park, South Lake Tahoe, North Sacramento, Yuba City, and the famous bay area.
As the state capital of California and home to the Sac State University, the real estate market in Sacramento has a label for being on the more expensive side. But is that true, or is it just a myth?
Let’s compare the Sacramento real estate market to the rest of the United States housing market.
Sacramento vs. California Cities
The first basis of comparison when trying to understand the Sacramento real estate market is to compare it to the rest of the state. Being the capital, it does draw a lot of business, which can lead to increased sales for realtors.
California is considered one of the most expensive states when it comes to the cost of living. Cities like San Francisco, Los Angeles, and San Diego top the charts for total housing costs. It also has other respectable cities like Santa Clara and Santa Cruz that are worth looking at.
The California Association for Real Estate uses a reference sheet that has access to every major city’s average selling price of a single-family home in March and April of 2021. So, what stands out?
San Francisco Real Estate Market
To no one’s surprise, San Francisco’s home values are among the highest, with the average median property price being $1.8 million. San Mateo is the only city that tops San Francisco, with an average median sales price of $2.1 million.
Another noteworthy competitor is the City of Angels, Los Angeles. Their average median property price is lower than some might have expected at $707,000. San Diego, in comparison, is a little higher, with the real estate median sales price going for $825,000.
As for the others, Santa Cruz’s average median property price is $1.265 million, while Santa Clara is not far behind San Francisco in the Bay Area at $1.65 million. This housing market might not be appealing to first-time buyers, but real estate investors are going crazy over it.
Where Does Sacramento Real Estate Fall?
So, where does this leave Sacramento? Pretty good, considering the local market average in April of 2021 was $490,000, making it the best investment property for new homeowners. The rental market is also attractive in Sacramento County, along with the tourist attractions.
In other words, you are only spending about 25% of the money compared to San Francisco!
Sacramento is in a very affordable area, with the average for Central Valley coming in at $435,000. That is the second cheapest region in the state, with the Far North coming in at just over $367,000.
So, if you were looking to move to another part of the state for more affordable real estate, you may want to think again. If these prices aren’t in your price range, you may need to leave California and go to a state with more affordable prices.
Sacramento Real Estate Market vs. US Cities Real Estate Market
Of course, California is just one of 50 states in the country. So, to see the overall picture, we need to look at real estate markets in the biggest cities throughout the country compared to the Sacramento house prices.
Remember, Sacramento had close to a $490,000 median property price average in April of this year. So, how does that stack up?
Well, in the rest of the US, the Sacramento housing market would be considered high. But popular cities like Seattle, whose houses are priced for sale at over $500,000, and Honolulu, has a housing market averaging around $600,000.
However, the Sacramento home values are compatible with some of the biggest cities in America, such as Boston and Denver. Boston homes sell for around $444,000, and the Denver market sells homes for approximately $433,000.
These are not considered low prices by America’s standards, as these cities are all in the Top 20 most expensive in the United States. They are also relatively high when comparing them to the national average. You can easily spend more money per square foot than buying a house in a different region.
For comparison, Portland goes for about $400,000. Salt Lake City and Austin come in at around $350,000. The more inventory of available homes in these price ranges helps realtors find quality homes for their clients.
Then, it gets even lower. Nashville and Las Vegas hover around $300,000, and Atlanta and Charlotte are as low as $250,000. Dallas even gets down to $225,000, and there are plenty of cities that drop to under $200,000. All the data shows that houses with reasonable prices are more attractive than those on the more expensive side for people who need to stick to a specific budget.
With Sacramento being double the price of some of the other cities in the US, it does not make for the most appealing city to relocate to if you are concerned about the prices of homes. However, as stated before, it is still on the lower side of California prices.
So, with that in mind, let’s see how Sacramento County and California stack up to the rest of the country when buying or selling real estate.
California vs. Some Other States
To understand the US real estate housing market, you need to know how much it costs to live in each state and some of the current trends.
Not much surprise here, but California has been on the high side of the real estate market for longer than the past few years. In fact, it is second in the entire country, only coming in behind Hawaii. The average in California is $505,000, and Hawaii tops it at $615,000.
Now, let’s take a look at some stats on the lower end of the scale. West Virginia has the cheapest housing market, at just $108,000. That is only about 21% of the price that it costs to buy a house in California.
Ohio is considered a relatively cheap state to live in, with the average home price at $151,000. When you compare that to San Francisco or Sacramento County, you can see how the lower cost might be appealing to people on a fixed income.
What State Falls In The Middle?
In comparison, Illinois is in the middle of the pack, coming in as the 25th most expensive state for the average home price. But theirs is still just under HALF of California, at $194,500. If you factor in the low-interest rates currently being offered, this real estate market is a bargain.
California has a big gap from even the most expensive states. Utah came in 10th, but they are just $279,000. Most notably, Massachusetts is right behind California, coming in third place. Their market price? About $382,000.
So, there is over a $120,000 difference between California and the next most expensive state.
What does this mean for Sacramento? It means that they are the capital city of one of the most expensive states in the country to buy a house. This can be great for sellers looking to move but perhaps a hurdle for buyers from out of state.
Keep in mind that many states also have local rent control laws that are important for anybody considering buying an investment property. This last year has been challenging on even landlord-friendly properties, where the pandemic took a toll on the market.
Explore Your Sacramento Real Estate Options
So, we learned from this study that the Sacramento real estate market is an expensive option versus a lot of other markets in the United States. It goes toe to toe with some major cities in pricing, but it is still an attractive option when looking at the rest of the state.
Are you ready to buy or sell a home in Sacramento or the surrounding bay area?
Contact us to find out how our realtors can help you get started and learn more about Sacramento Real Estate.
