You will read it in the news – REAL ESTATE MARKET SLOWING DOWN. Let me tell you why this is true, but not as true for the Sacramento Area.
This statement is true due primarily to interest rate going up – money is more expensive, making it harder to afford a home. A natural or imposed correction is needed so that our economy continues to growth steadily. Secondly, during boom times there is always a segment of society that is looking for the “grey clouds” on the horizon. The headlines actually create fear and panic, which ward people off.
Sacramento is not insulated, however, the factors that bolster our local economy are favorable in conjunction with a steady rise in the housing market.
- Immigration to California, especially the Sacramento and surrounding area has increase the demand for housing. You might not know this, but statistics show that immigrants to the United States (not just from Mexico) are a prime candidate for buying a home within 8-10 years of immigrating. FYI, the Russian and Eastern European community is huge in Sacramento.
- Cost of housing is still relatively affordable in comparison to the Bay Area. Therefore we have a huge immigration of people from the San Francisco area who exclaim, “Look at the house we can now buy!”
- Company Relocation and New Jobs: Many large companies are relocating and placing their big offices in the Sacramento area, creating a large demand for housing.
- New Home building: Places like Natomas, Elk Grove, Folsom, Rocklin, and now even Lincoln are building houses like crazy to accommodate the demand. They literally can’t build ‘em fast enough.
- Urban Renewal: There has been a resurgence of people who want to live in the Midtown/Downtown area, with the onslaught of new restaurants, clubs, and hip/trendy businesses, popping everywhere – yes there is beginning to be culture in a place that use to be only know as a cow-town. The city has current plans to renovate the old train yard to be transformed into a premiere Riverfront attraction – perhaps even housing a new arena for the Kings!
- Inflation – this is a factor that is not localized, but actually continues to keep the housing market growing. Or as my dad says, “As long as the government keeps printing money, I’m not worried about my home loosing it’s value.”