Merced/Sacramento investing

[Gayle Eisner]

Any thoughts on investing in Merced, CA or Sacramento area? Sac is so big I have seen it not depreciate for years and years at a time but now seems to be doing well. Merced, college town, prices reasonable but endless building may be an issue as well. I was thinking about duplex, triplex or SFR in older established neighborhoods? Thoughts? thank you !!!

[Dan H.]

The University of California has allocated a lot of funding to UC Merced.  In addition, Merced income is growing at near fastest in nation.   When I look at UC campus locations, Merced is the lowest cost location of all UC campuses.  My son goes to UCSB.  Do you know what a shared BR goes for at UCSB.  His 2 BR unit has 5 students each paying over $1k/month.  San Diego, LA, Santa Cruz, etc are significantly more costly RE than Merced.

In summary, Merced has multiple indicators that point to above average appreciation.  I would choose Merced over Sacramento almost solely due to UC Merced (Merced salary growth rate also would be a consideration).

Good luck