Caught this article a few days ago from the SacBee:
Sacramento Launches 10,000 unit Downtown Housing Intiative
For those investing in the Sacramento market and willing to share, I
I've thought about this a bit, and overall I don't see it as a negative.
As much as Kevin J and the bunch would like to think that they are turning Sacramento into this modern city, it is doing just fine on it's own, and doesn't need their help.
If and when this housing initiative moves forward, it's not going to be because the initiative is driving job growth and bringing more people to down town, it's going to be the other way around, that the jobs are already here.
Realistically, any new housing like this is going to be high priced, high end apartments, which if anything, will be replacing cheaper housing already in place. This will further increase the average rents in downtown and midtown, furthering the trend of pushing the ORIGINAL growth developers (quirky restaurants and artists) out towards Oak Park. Since that's where I'm positioned, it might be more of a good thing.
I worry more about the increase in residential housing. East Sac has two projects going forwards, one at the old landfill (McVillage), and one at the old Mercy Hospital. Curtis park has Curtis Village in progress already, and Land Park has multiple prospects shaping up close to the river (The Mill). Not mention the entire Rail Yards when ever that starts developing. The more I think about this, though, I realize that if there is demand for high rise apartments in downtown/midtown, there is also going to be just as much if not more demand for actually houses with lots in close proximity, so we're probably good there.
Thanks for your input. It's strange to me to think of your position on Oak Park though... I guess I've been out of the area for quite a while, but I spent my childhood up till 9 years old in and around Oak Park. I've heard good things about the area developing, but it's hard for me to reconcile the written news with my own experience.
The financial collapse was the best thing to ever happen to Oak Park. Most of the specultive investors, who were just holding on to houses without making improvements and waiting for them to appreciate, got wiped out. It became a bonanza for flippers who could make great houses with full gut rehabs, and still sell them for cheap. Almost every house on the street I lived on turned over during the last five years. There are now family with kids on the block, and hipsters in skinny jeans smoking on their porches. Don't get me wrong, there are still lots trashy houses but it is improving, and thes propeties are still slowly churning over as the value projections change for the owners. McClatchy park had a 3 million dollar renovation last year. The brewery is getting great press, one of the tire shops is getting replaced with a nursery specializing in drought tolerent lands scaping. And then there's this:
The real selling point comes down to value. You can get a house in Oak Park for a third of the price compared to the other first ring residential neighborhoods. My friend that's moving into my recent purchase is estatic. For only a hundred bucks more a month he's getting a fully updated house, with a yard, and a garage, compared to the tiny crappy apartment he has in midtown.
The apartment projects I've heard about in and around downtown are either:
A-High End (McKinley Village/Curtis Park/Sutter Hospital
B-Have an affordable component
C-Market Rate apartments and pretty dense...This can make your rental very attractive if you can show value by comparison (extra sq ft for less rent and similar amenities).
Oak Park and parts of West Sacramento seem to be the only nice first time home buyer markets really close to downtown. Also, the Mill looks to have price points for first time home buyers.
Anyone sitting on rentals with nice amenities in midtown/downtown/west Sac/Oak Park should be sitting pretty and seeing both appreciation and increased rents.
@Andy A. I can't help you as I self manage.
What zip code (s) correspond to Oak Park / East Sac?
I know this is an older thread, but I started seeing some pricing on the new developments coming online, and I do think these developments might have a small impact on the greater housing market in Sacramento.
Particularly, I think the premium markets might get some temporary price ceilings inserted at the price levels the developments are selling for. If you can suddenly get a 2000sq/ft townhouse, brand new, with all the amenities, and a built in garage, for 600K-ish, the 100 year old 1800sqft bungalows might cap out at that price.
I'm not sure if this could cause price decreases , but it could cause appreciation rate slow down. This affect could trickle down a little, but probably wouldn't affect transitioning neighborhoods much.
Granted, there might be a bunch of suburban-esc buyers who only consider new developments, and would like to move closer to downtown if the supply existed. Given enough of those, there might not be much impact after all. And actually, something like this could actually bring more stability to the market, and allow more gradual but consistent gains. Then again, what do I know, I'm just some guy who spends too much time reading the MLS.
The new stock (Mill at Broadway, Curtis Park Village, etc) are modern townhouse style 2/3 stories and pretty narrow. I don't think they will steal away many of the same buyers seeking a single story craftsman or Tudor. I am puzzled at these new builds marketing to millennials with a $400k+ starting price point.
I think it is a great time for remodeling contractors as I think many of the 2/1's in the city center will be turned into 3/2's.
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