Reprinted from an article in the Sacramento Bee, November 30, 2016 by Dale Kasler
It’s still more subdued than it was a decade ago during the housing bubble, but Sacramento’s housing market is about to become one of the hottest in the country, according to a prominent online real estate site.
Realtor.com predicted Wednesday that greater Sacramento will be the nation’s fourth-hottest housing market next year, as measured by price appreciation and growth in sales volume. Sacramento trailed only Phoenix, Los Angeles and Boston in Realtor.com’s rankings of the 100 largest metro areas.
Sacramento’s strengths are relative. Much of the country is expected to slow down somewhat in 2017 as mortgage rates increase and other factors kick in. That leaves Sacramento looking better than most, said Javier Vivas, an economist at Realtor.com.
“We’re not saying it’s going to be a booming market,” Vivas said. But he said the Sacramento area will enter the upper echelons thanks to solid job creation and “pure, sheer population growth.” Much of the population growth will be spillover from the Bay Area, he said.
Sacramento home prices will grow 7.2 percent in 2017, according to Realtor.com’s forecast. The volume of home sales in the four-country region is expected to increase a more modest 4.9 percent. Taken together, that puts Sacramento at No. 4 overall.
CoreLogic said Sacramento County’s median home price of $310,000 was still 17 percent below the pre-recession peak. Placer County’s median price of $429,000 was 15 percent below the peak. When price inflation is factored in, LePage said the disparity between current prices and the peak is even greater.
One of the big factors in Sacramento remains the strength of the Bay Area market. In a hot market, many buyers in Sacramento are Bay Area refugees seeking cheaper housing and a quieter lifestyle. Median prices in the Bay Area have jumped 6 percent since last year, to $675,000, according to CoreLogic.
