Why was Sacramento named the #1 housing market in the country in 2021 and what does it mean for you?
You may have been hearing a lot of buzz around town that Sacramento has been ranked as the hottest 2021 housing market in the U.S. by Realtor.com. Your next two questions were probably, “How did Sac end up being on top of the list,” and perhaps more important, “What does that mean for me?” In this blog we hope to give you some of that background as well as a few perspectives on the impact this will have on you as a buyer or seller in this market.
The ground rules behind being ranked #1
To start, it’s helpful to know how Realtor.com approaches their ranking. First, they factored in past sale prices and number of sales. They then look at the rate of new construction along with previous and anticipated economic, household, and income growth in the 100 largest metropolitan areas. (Metros include Sacramento proper, as well as nearby smaller towns and urban areas.)
On average in the U.S., all the cities that made the top of the list were expected to experience higher price growth and more sales than the rest of the country. Median home list prices were anticipated to rise 6.9% in these metropolitan areas, compared with 5.7% for the rest of the nation. And, sales were expected to increase 13.1% annually versus 7% nationally.
For Sacramento to top the list, we had a median home price of $554,000, an anticipated home price change of 7.4% (1.7% higher than the rest of the nation), and an increase in home sales of 17.2% — which was an impressive 10.2% higher than the national average.
Clearly this is due in large part to Sacramento feeling the fallout of the Bay Area exodus. Buyers have been flooding the Sacramento market to flee the ultra-expensive Bay Area in search of more reasonably priced homes with land, yards, and more. In Sacramento, buyers can lock up homes at roughly $284 per square foot — compared with $679 in San Francisco. (That’s 139% cheaper if you’re wondering.) Given the heavily tech-based workforce these new buyers also tend to be white-collar workers who are now able to work remotely and don’t want to move too far from their offices in the Bay Area.
Ok, got it. So what’s a hot housing market mean for me?
For starters, it depends on whether you’re a buyer or seller. So, let’s break things down from both perspectives:
I’m a buyer
If you’ve been looking to buy in the Sacramento region, this won’t be a surprise to most of you. Inventory is in short supply and when great homes go on the market it’s an overwhelming competition to come out as the buyer of choice. Put simply, Sacramento has weeks of listings but months of buyers. You can do the math.
To accentuate the state of the current market, think about this: Almost half of the sales in 2020 got into contract in 10 days or less. What this means for buyers is that you have to be ready to move fast in this aggressive climate. Anyone not ready to move immediately after a home is listed is practically out before it begins. At House Real Estate, we’ve been fortunate to have helped our clients win the vast majority of their offers. Whether it’s pre-approvals, limiting contingencies, or helping our clients close quickly — buying in Sacramento requires a thoughtful strategy in order to come out with the win.
I’m a seller
If you’re looking to sell, obviously you’re looking to maximize your take during this unique time. In order to do that correctly, you have to start by making sure you know the true value of your home in this market. Although there are dozens of online calculators, the most accurate way is to work with a realtor to prepare a comparative market analysis. Every client at House starts with an evaluation of similar homes that have recently sold in their area in addition to factors such as their property’s age, condition, features, lot size and so on. Through this data we can provide a more accurate fair market value.
And although Sacramento’s hot market does mean a faster sale at or above asking price, don’t think there aren’t pitfalls to avoid. If you want to maximize your profit, you’re going to need (and want) multiple offers on the table. So don’t overlook the importance of home-staging and leveraging virtual home tour technology that really brings your home to life.
Given that you can anticipate selling quickly with short contract deadlines, you also should be prepared to have documentation prepped and ready for your potential buyers. Have disclosure documents prepared and ready to go before the house goes on the market. Ideally, line everything up so it appears you’re ready to sell immediately — helping to usher a buyer to make a quick closing offer.
Last, don’t undervalue working with professionals to help you market your house. To attract the right buyers and as noted before, quite a few competitive offers to breed some healthy competition, you still need to maximize your home’s exposure. The best way to do so is to hire an agent who is seasoned at doing just this. At House, our marketing program includes layers of digital search, advanced CRM platforms, outbound digital marketing, personal referrals and outreach, and much more.
Whether you’re buying or selling in Sacramento these times are unique. (Maybe even never-seen-before.) Like any unique situation, there’s a lot to be excited about as well as worthy of your consideration. It’s impossible to simply know it all on your own, even with hours of online research. Half of finding success in these crazy markets are the nuances that fall outside of standard practices — familiarity with neighborhoods, networks of referrals and buyers, true assessments of home values based on a deep understanding of the neighborhoods, etc. The Sacramento marketplace is now moving at light speed, you need professional partners who live, breathe, and study the changes that are occurring on a daily basis. It’s the only way to allow you to fully take advantage of these opportunities.
About House Real Estate
Tim Collom and his group of agents have built House Real Estate on the foundation of client relationships and their extensive knowledge of Sacramento. The group’s leadership, drive, astute negotiation skills, top-tier creativity, social media prowess, and superior marketing have earned them a stellar reputation. But it’s the simplicity and ease of working with this team that clients remember most. The door is open at House Real Estate. To learn more, visit houserealestate.com.