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Posted almost 7 years ago

Sacramento Real Estate Stacks Up!

It may not be a well-known fact, but real estate makes the world go round! Land has always been a commodity that they are not making more of. When you consider the impact of this, it makes perfect sense why in major cities like San Francisco, almost every piece of land is occupied by some kind of real estate.

Globally there appears to be uncertainty in the economic and political outlook. However, in the U.S. we remain attractive for Foreign Investors. This is especially true when it comes to real estate investing. The most prevalent countries inflowing their investment dollars are China, Canada, Norway and Singapore. In fact, in 2015 foreign purchases of U.S. real estate toppled at $87 billion for that year according to the Association of Foreign Investment in Real Estate (AFIRE). Changing policies such as the Foreign Investment in Real Property Tax Act (FIRPTA) will help fuel foreign real estate investment as well. This act allows foreign investors to be treated similar to their U.S. counterparts. Why are these statistics important? Many people, not just real estate investors, are somewhat concerned about the impact of foreign investors. Residential, commercial and construction will all be affected by the FIRPTA political overtures.

Supply and demand in 2017 shows no signs of improving. Single family residences are in high demand especially for FIX/FLIP investors. What remains in high supply are multifamily homes. New construction is still emerging slower overall as compared to SFR, multifamily, student and senior housing and industrial.

Closer to home in the Greater Sacramento area, we saw appreciation grow at a rate of 11.2% during the second quarter of 2016. The national average was only at 4.9% ! In a three year average, appreciation in Sacramento boomed at 36.6% and 17.8% for the rest of the country. Due to unemployment rates remaining low and housing affordability remaining high, new housing construction is actually on the rise. Sacramento construction on SFR has ballooned to 25.3% compared to the national average of 10.6%.

For the last nine years, natives of the Greater Sacramento area of enjoyed some great appreciate in real estate values. See illustration below:

Home Appreciation Trends- Sacramento in Last Nine Years:

One Year Ago

Sacramento $37,504 The National Average $14,963 Three Years Ago
Sacramento On average $99,168 The National Average $46,878 Five years ago
Sacramento $179,313 The National Average $82,353 Seven Years ago Sacramento $165,694 The National Average $77054 Nine Years ago Sacramento $11,579 The National Average $31,126    

Real estate investors will see opportunities in foreclosures & short sales. There are still over 2500 homes in the area that fall into that category.

Investing in downtown Sacramento is an excellent choice if you are a business owner looking for retail space. The Golden One Center, where the Sacramento Kings play, has raised it’s Golden Wand over all of downtown! It’s presence has forged a new beginning for the once flailing downtown economy. If you are fortunate enough to have the capital now, it’s a great place to see real estate values soar in the coming months – not years! Overall, Sacramento remains one of the hottest markets nationwide.

Source: NREIonline.com

Source: Fortune Builders online article 2016-by Than Merrill-Sacramento, CA: Real Estate Market and Trends 2016


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