Will Sacramento’s Housing Market Crash?


The housing market in the Sacramento area is skewed towards sellers, with a combination of pent-up demand and a diminishing housing inventory. It's highly unlikely that the region's housing market will crash anytime soon. In fact, this website explains the region is increasingly attracting Bay Area residents, who may find Sacramento's prices more affordable than in the coastal markets. Moreover, the city's population has grown by more than 10% in the past decade, so home prices in the Sacramento area are likely to rise even more.

Rent in Sacramento is up

The housing market in Sacramento is on the rise. The region has been listed as one of the nation's top 10 rent increase areas for 2020. Rents are rising because of the shortage of available inventory and increased demand from people moving out of the Bay Area. Currently, rental prices are about a third of the Bay Area's cost. However, with the lack of available inventory and increased demand, rents are expected to continue to increase.

While mortgage rates remain low, Sacramento rents are rising at double-digit rates. During the pandemic, rents stalled in some expensive areas. Since the economy has rebounded, however, renters are returning to the rental market and are paying higher than their incomes. The price of rent is considered a burden if it takes up 30% of a household's income. Fortunately, there is no risk of price declines in the near future.

Rent in San Francisco is down

The latest statistics show that the vacancy rate for San Francisco apartments hit 10.2% in July. That's the highest rate among major U.S. cities, according to the RealPage website. The national vacancy rate was 4.6% at the beginning of 2020 and hasn't risen much above that level since then. The city's high vacancy rate prompted landlords to cut rents this summer, resulting in a large drop in rents.

While the overall city has suffered, San Francisco proper has seen the largest reduction in rent prices. Two-bedroom units in San Francisco are now less than $2,300, down from nearly four thousand five years ago. While the vacancy rate has dropped in the entire city, it is still too high for many residents. This is likely due to a combination of factors, which include the availability of affordable housing. However, some experts believe that there are still several factors behind the low-rent levels in San Francisco.


After the recession ended, home sales in Sacramento County began to recover. The homeownership rate in the county peaked at 67% in 2005, but many homeowners lost their homes to foreclosure. The homeownership rate fell rapidly in the following years, bottoming out around 57% in 2011. Since then, many buyer-occupants have returned to the market. The homeownership rate in Sacramento County is now slightly above pre-recession levels, but not quite at Millennium Boom levels.

The recovery in the Sacramento housing market has been more gradual than in other parts of the state. Although Sacramento real estate jobs have increased at a slightly slower rate than the average for the state, the increase in construction jobs has been more rapid. In 2020, the pace of income growth in Sacramento will surpass the state's average of 9.4%. That means Sacramento County residents will enjoy a higher standard of living than in the previous recession.

Fear of a housing bubble

Fear of a housing bubble is nothing new in Sacramento, but it's been on the rise for a few years now. A new study found that property values are related to the number of occupants living in a household. Liberals can't ignore these concerns because it's true that some neighborhoods have become too expensive, and a few neighborhoods are even going through an upsurge. But how are these worries related to Sacramento's housing market?

Earlier this year, many people were scared of the effects of the housing bubble in their communities. However, the new bill will mandate home ownership for all citizens in California. This measure will prevent speculative activity by corporate groups that have already purchased 17% of the housing stock in the state. That's good news for the average homeowner, but it's a mixed bag for some. Still, some Sacramento movers are worried that the market is already saturating.

Impact of COVID-19 on the Sacramento housing market

The Sacramento housing market is expected to benefit from the exodus of people from other cities. This population shift will allow people to trade in cramped living spaces for more spacious ones. The city's rental demand will also increase. This in turn will reduce the vacancy rate. This is good news for renters, as the median home price is below the state average. However, the price of real estate in Sacramento is still low compared to other areas of California.

One of the biggest benefits of living in Sacramento is the lower costs compared to neighboring cities. Another perk is that a lot of people are working remotely. For the last decade, the Sacramento housing market has experienced year-over-year appreciation, but this trend has come to a halt after the Covid pandemic hit the state. With lower borrowing costs and higher demand, the Sacramento housing market is expected to rebound soon.