Sacramento is one of the hottest real estate markets in the United States right now. Homebuying has become increasingly competitive throughout 2020 and into 2021. There's some good news for weary prospective buyers, however. While the seller's market is expected to continue, inventory is on the rise.
Here's what buyers and sellers need to know about Sacramento's housing market in 2021.
Sacramento Housing Market Snapshot
A Red Hot Real Estate Market
Data from Redfin shows that the average sale price for a Sacramento home has grown 22.9% since last year, with the average home selling 4.4% above list price. Redfin gives Sacramento a competitive rating of 92/100, a red hot score indicating a seller's market.
In April of 2021, California housing prices broke records, with the median home price soaring to $813,980. Throughout the state, buyers are offering bids over the asking price, with more than two-thirds of homes selling over list price, the highest level since 2008.
With a real estate market this hot, ensuring that production continues and that affordable housing is a priority is essential.
Increased Housing Production
While we're still experiencing an extremely competitive seller's market, there is some good news for buyers -- housing production has also increased.
Sacramento saw an 18% increase in housing production in 2020 compared to 2019. According to the City's acting long-range planning manager, "this is the largest number of new housing units in 15 years."
The City of Sacramento is continuing to work to increase housing production to meet the future housing needs of residents.
The City continues to work to increase housing production to meet future housing needs. Among other efforts, Sacramento has streamlined the process for development. This makes it easier to build by reducing certain fees and simplifying the permit process.
Focusing On Affordable Housing
With a competitive market and housing prices on the rise, ensuring residents have access to affordable housing options is especially important.
In Sacramento, production of affordable housing increased significantly in 2020 as well, with 33% of units affordable to residents making less than $48,000 a year. The City of Sacramento is working to ensure this trend continues by leveraging resources to push projects forward.
One such project is Project Homekey, which converts motels into extremely low-income housing units. This program has expanded to create manufactured home developments with St. John's Program for Real Change and WEAVE.
Other affordable housing developments began construction in the past year, including in the highly-desirable Railyards development project.
In 2020, the A.J. broke ground at the Railyards, a residential project which will include 20% affordable housing units. In May 2021, funding passed for a senior affordable housing complex at the Railyards, The Wong Center Senior Housing Project.
Sacramento's housing market has boomed following its slump in early 2020 after the COVID-19 pandemic began. New developments like The Railyards are bringing new opportunities and growth to Sacramento, making the city an attractive home for buyers throughout California.