Sacramento Real Estate Prices Expected To Climb in 2017
The current Sacramento Real Estate Forecast for buying homes is a bit more subdue than perhaps a decade ago before the housing crisis, but Sacramento’s real estate market is now poised to become one of the hottest in the country, according to leading real estate websites.
Recently Realtor.com predicted Sacramento will become the nation’s 4th hottest housing market next year. In the same strate is other cities like Phoenix, Los Angeles and Boston in their recent rankings of the Nations 100 largest metro areas. Local home prices in the Sacramento area are predicted to grow 7.2% in 2017, according to recent forecasts. Putting Sacramento poised for #4 overall.
Hottest Housing Markets of 2017
Sacramento will be the nation’s fourth-hottest housing market in 2017, according to Realtor.com
1. Phoenix-Mesa-Scottsdale, Ariz.
2. Los Angeles-Long Beach-Anaheim
3. Boston-Cambridge-Newton, Mass./N.H.
5. Riverside-San Bernardino-Ontario
6. Jacksonville, Fla.
7. Orlando-Kissimmee-Sanford, Fla.
8. Raleigh, N.C.
9. Tucson, Ariz.
10. Portland-Vancouver-Hillsboro, Ore./Wash.
Housing Prices Exploding In The Bay Has Driven Demand in Sacramento
With prices exploding in the Bay Area, it’s seems to have pushed a bit of a housing demand in Sacramento. Realtor.com predicts housing prices in San Jose and San Francisco are expected to keep climbing continuously, by more than 8%. Yet growth in Sacramento home sales volume will be minuscule, just above 1 percent, leaving the Bay Area in the bottom half of the lower 40 in Realtor.com’s overall rankings of housing market activity for 2017.
“It’s encouraging to hear this type of information coming out of Sacramento,” says Carlos Montoya of Dean Adams Real Estate Brokerage. “We’ve been an ancillary market in California for so long compared to other markets.”
Montoya thinks the forecast is plausible, based on what he’s been seeing on the ground and out in the field. The local market is extremely positive. “That normally doesn’t happen,” he said.
The Sacramento Region Suffers From Inventory Shortage
The Sacramento region still suffers from an inventory shortage and a scarcity of the types of high-paying jobs typically found in the Bay Area. So while overall demand may be strong in Sacramento buyers still remain price-sensitive and won’t overpay in this region.
“Buyers are steadfast in their determination not to overpay,” he said. “If the property isn’t priced properly, it’s just won’t sell right away – that property is going to sit on the market quite a while.” Montoya explains price appreciation has cooled off in the last few years, as the market improved in the aftermath of the recession.
We’re Rebounding But Slower Than Expected – Buyers Remain Cautious
Clearly, Sacramento is still rebounding from the collapse created in 2008 when the housing market crashed. While unemployment has dropped to 5.2%, the housing market still wasn’t what it was prior to the recession. According to CoreLogic, the median home price in Sacramento of $310,000 is still 17% below the pre-recession’s highest point. Placer County’s median price of $429,000 is -15%. With price inflation factored in, the disparity between current prices may be even greater.
“I’d say the growth is more likely 5 to 5 and a half percent” says Carlos Montoya. “The Realtor.com report may be a bit over-opptomistic, but it’s still exciting for our area”.
Prices are growing more slowly, compared to a decade ago. Realtor.com’s forecast of a price increase of 7.2% in 2017 still fall well short of the 20% annual gains recorded during the pre-recession area, when lower interest rates and loose lending standards created a bubble that proved to be unsustainable.