Specialists say inflow of patrons from San Francisco creating main challenges for Sacramento’s housing market
SACRAMENTO, Calif. (KTXL) – As the exodus from the Bay Area to Sacramento continues, local realtors and appraisers scramble to keep up with fluctuating demand from home buyers.
As a result of the COVID-19 pandemic, the Sacramento area is now a seller’s market, which means there are many homebuyers but limited inventory. This has created an unprecedented and challenging real estate market for both realtors and potential homeowners.
For El Dorado Hills real estate agent Melissa Quade, who experienced this 10 years ago in Seattle, seeing a big boom in the real estate market is not an unfamiliar job.
“I saw prices go up exponentially when I was in this market and now I see it here too,” Quade told FOX40.
But COVID-19 has created a unique situation for Quade and other realtors in the Sacramento and Bay areas.
San Francisco residents fled to Sacramento in large numbers during the pandemic: report
A recent CBRE research study showed that migration from densely populated and expensive areas has increased tremendously. Case in point: Moves from San Francisco to Sacramento County increased 70%.
“The buyers are in full force out there,” explained Quade. “Lots of movement from the Bay Area. You don’t have to live there anymore because you can work remotely so come here where you can get a lot more bang for your buck. “
The problem right now, however, is that sellers are in short supply.
“In El Dorado County, where I am, we have 75 percent fewer records than last year,” Quade said.
Quade added that this is frustrating for potential home buyers, “not just because they don’t have the money the Bay Area buyer has, but just because things are being done very, very differently now, and that Buyers have to take a much greater risk. ”
Quade said the median retail price in the Sacramento area, which includes counties of Sacramento, Placer, El Dorado, and Yolo, rose over 20% between March 2020 and March 2021. Since January of this year the market has risen 9% and is on the right track to keep rising.
“We haven’t seen a stock shortage like this in recent history, and we haven’t seen that many buyers out here, and that just creates insane,” Quade said.
There is also the gap between the estimated value and the real market value of homes, which is also difficult for appraiser and market analyst Ryan Lundquist.
“Our average price in January was $ 485,000 and just months later it was about $ 530,000,” Lundquist said. “And so we really saw very, very rapid growth.”
Out of the 30 largest subway areas in the US, Sacramento ranks number one in terms of net removals, most of which come from San Francisco.
And while it may seem daunting, the Sacramento real estate market offers plenty of opportunity.
“We actually had high sales volume for 10 months in a row,” Lundquist told FOX40. “Buyers are pulling the trigger for what’s out there. So we actually got numbers that are higher than 2019 and 2020.”
“It’s been a seller’s market here for a long time, but not like that,” Quade said.
Quade’s advice to first-time buyers in Sacramento is simple: be patient, competitive, negotiate terms, and focus on homes that have been in the market for at least a week.
According to Lundquist, there is good news for buyers: offers in the region are on the rise, and mortgage applications at the national level have been falling for three straight weeks. That means less competition.
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It’s not all bad news for local real estate. In fact, Quade said this was the best time to sell. The only thing a seller is best at is finding a new home out of state.
Lundquist also gave advice to sellers: don’t be overzealous and put off potential buyers.
“Although buyers are hungry, they are not so desperate where they are literally paying for anything for any price and for any home,” he said.
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