Sacramento Housing Market Conditions, Spring – Summer 2017

Last week, we wrote about a housing trend identified by the real estate brokerage Redfin. Apparently, many of the folks who are leaving the San Francisco Bay Area in search of more affordable homes are relocating to Sacramento.

You might get more house for your money, when buying in the Sacramento real estate market. It currently boasts one of the lowest median home values of any metro area in California. But don’t let that fool you. It’s still a hot housing market with plenty of competition.

For those who might be making a similar move, we offer an updated look at Sacramento real estate market conditions in 2017.

Sacramento Real Estate Market Conditions in 2017

The first thing you should know about the Sacramento housing market in 2017 is that home prices have risen sharply over the last couple of years — and they’re still climbing.

Of course, if you’re moving from anywhere in the San Francisco Bay Area, you’ll find the Sacramento real estate market much more affordable by comparison. For the sake of comparison, here are the median home prices for Sacramento and other major cities in the state as of May 2017:

• Sacramento: $293,600
• Los Angeles: $622,900
• Oakland: $676,900
• Riverside: $342,700
• San Diego: $558,600
• San Francisco: $1,167,200
• San Jose: $862,800

Home prices in Sacramento rose by more than 11% over the last year or so (from April 2016 – April 2017). Analysts expect values to continue rising for the foreseeable future, but probably at a slower — and more “normal” — pace than previous years.

Zillow recently forecast that Sacramento home values would rise by 5.4% over the next 12 months, which is more than double their outlook for the nation as a whole.

As far as the big cities and metro areas go, Sacramento is clearly one of the most affordable housing markets in California, going into the summer of 2017. That’s why many home buyers are relocating to the capital city from other parts of the state.

Incidentally, the Inland Empire is experiencing a similar trend, due to the relatively affordable housing there. In this case, a lot of home buyers are moving away from the more expensive coastal cities to take advantage of cheaper housing in places like Riverside and San Bernardino.

Stiff Competition Among Home Buyers

Those comparatively low home prices are certainly appealing, but they’re also boosting demand for housing. This is particularly true for Sacramento. Conditions in the Sacramento housing market are tight right now, where inventory is concerned. But demand is on the rise, partly due to population growth. Put these two things together, and you have the recipe for a highly competitive real estate market through 2017 and into 2018.

Perhaps that’s why the economists at Zillow recently listed Sacramento as one of the ten worst markets for first-time home buyers, citing stiff competition among other factors. Earlier this year, the company also predicted that the state capital would be one of the hottest housing markets in 2017, for the reasons mentioned above.

Disclaimer: This report on Sacramento real estate market conditions in 2017 draws from a number of sources and third parties that are not associated with our company. We have presented them here as an educational service to our readers.