A new report by a national real estate listing website predicts Sacramento will be a top market in the nation to buy a home in 2017.
Realtor.com Chief Economist Jonathan Smoke analyzed data from the nation’s 100 largest metropolitan markets. Smoke’s research shows as unemployment rates drop in those markets, consumer confidence is growing.
Cities topping the list are Phoenix, Los Angeles, and Boston — The Pacific West leads in growth with 11 cities on the top 20 list, five of those cities being in California.
The research estimates the Sacramento market median home price to be $420,000, to show a price growth a 7.18 percent, and a sales growth of 4.92 percent.
Like millions of Americans, Jason Banta, was effected by the 2008 real estate market crash. He was forced to short-sell his home. He has been renting a home in Roseville with his wife and two children ever since.
“So, now that the market’s rebounding, interest rates are so low, it’s just a great time to buy,” Banta said.
Nearly a decade later, with fallen interest rates and home prices on the rise, Banta is ready to buy another home.
“We’re starting to see homes to be investments once again,” Banta said.
Coldwell Banker real estate agent, Cara Ryan, said she is seeing two groups major groups of people looking to buy in the Sacramento market — Those from the San Francisco Bay Area and those like Banta who were negatively effected during the recession and are now looking to get back into the market.
“Clients from San Jose, Santa Cruz, saying that now’s the time that we want to come over here to get a little bit bigger house,” Ryan said.
However, demand for homes remains high because inventory is low, Ryan said.
“I do have buyers that are cautious, I do. But at the same time it’s been several years so it’s not something that happened last year and they’re still feeling it,” Ryan said.
George Jouganatos with Sacramento State University has worked as an economist for more than 25 years. He describes the growth in the market as a win, lose scenario.
“Demand for these properties, higher price of these properties,” Jouganatos said. “But the demand on our infrastructure cannot withstand it.”
The Sacramento region has hit its population cap, Jouganatos said. The area’s roads, schools, and other public infrastructure would need to expand to adequately serve the population.
People moving to the area will likely benefit, especially those coming from places like the San Francisco Bay with salaries above the Sacramento average who also recently sold their home in the Bay Market where real estate values are much higher.
The effect of these bay area buyers relocating to Sacramento could mean an increase in the cost of living such as rent and property prices, Jouganatos said.
If you are concerned about another potential real estate crisis, Jouganatos said we’re far away from that.
Copyright 2016 KXTV