According to the Sacramento, California and National Associations of Realtors, in the last 25 years, homes in Sacramento have appreciated 7.4% per year on average, with several periods of ups and downs during that time. This latest uptick here was fueled largely by historically low interest rates, migration to Sacramento from other more expensive parts of the state (bay area, southern CA), and local job growth. Compared to metro areas in rest of the state, Sacramento's median home price is among the lowest. The subsequent downturn in the local market is fueled by riskier mortgages going into default, excess housing inventory, continuing new residential contruction, and (even though they are still near historic lows) rising interest rates.
Not all neighborhoods in Sacramento County have been affected in the same way. For example, areas like Elk Grove, Natomas, and Rancho Cordova where new construction is still going on, and foreclosures represent a high proportion of the current 'for sale' inventory, are suffering double digit declining values. I consistently tell my clients if they wish to purchase homes in those areas to seriously evaluate their reasons, make sure they are planning to stay in the home for several years, and to consider waiting a year and then re-evaluate the local markets in those areas.
On the other side of the coin, for example, areas like East Sacramento, Land Park, and the Arden/Carmichael area, where there is no new construction (exceptions being the occasional spec house), there will not be any new construction, the neighborhoods are older and established, the neighborhoods are close in proximity to downtown Sacramento, there is not excess inventory, and foreclosure properties are few and far between, are experiencing consistency in prices, and even a slight (1-2%) uptick.
Real estate is one of the most popular investments is because of its consistent appreciation coupled with the some of the best tax incentives available.
Enclosed in this post are a couple graphs...The one at the top represents the Land Park / Curtis Park 95818 statistics for the last 14 months. The one here at the bottom represents the Natomas area 95833 - 95838 statistics for the last 14 months. As you can see, they are quite different! I do have the full market report from the National/Sacramento Association of Realtors, and the full Trendgraphix/MLS reports, but they are miles long and I can not post them here. If anyone wishes to have them, I am happy to email you directly...please email a request to me at erin@erinattardi.com.
