Stockton & Lodi To Be #4 Housing Market In 2018
Well, well, well... whaddaya know... my sweet little hometown of Stockton, California has some big things planned for 2018:
- https://cvbj.biz/2017/12/04/stockton-lodi-ranks-no-4-top-market-list-2018/
- https://research.realtor.com/2018-national-housing-forecast/
Much in the same way that I boasted about Sacramento last year when it was the #4 spot, in this post I shall make my case for why you (yes, YOU Mr. Bay Area Investor), should consider making an investment in Stockton this year.
TO ALL THE NAY-SAYERS:
My oh my, would I be amiss if I didn't first erase your overwhelming doubt and skepticism to allow you to hear clearly what I am about to say. Last year, I heard sooooooo many people poo-poo on the idea of investing in Sacramento for all sorts of reasons. But the end-all-be-all argument most used was that we were at the peak of the market and buying now was a stupid decision, blah, blah, blah, etc., etc.
Yes, the best time to buy was 2010-2012, and the best time to plant a tree was 20 years ago. The second best time is now.
For a personal anecdote to illustrate that we've still got plenty of room to grow, in October of last year I purchased a home in Sacramento for $260k, and right now my next door neighbor who is a model-match and the near-perfect comp is set to close on selling his house for $320k :-D
That's a whopping 23.07693% yearly appreciation my dear friend. If only more of those nay-sayers had listened.
Stockton will be a much tougher sell for most of you than Sacramento, for all the reasons I listed here in my guide on how/where to invest in Stockton (still highly relevant):
A large part of the reason most investors turn their nose up on Stockton is because of all the bad headlines. That's all most people know Stockton for. Here are some of the greatest hits from the past decade:
- Stockton Breaks Homicide Record in "Bizarre" Shooting Spree
- Stockton, CA is Now Officially America's Most Miserable City
- 600 Police Gunshots Fired During Stockton Bank Robbery Declared "Excessive"
- Stockton is the Largest City in the Nation's History to File for Bankruptcy
- Former Stockton Mayor Arrested for Embezzlement and Playing Strip Poker with Minors
No wonder most of you think Stockton plays out like a video calculating Arnold Schwarzenegger's Movie Kill Count. (As a side note, I much more prefer Arnold's 160 Greatest One-Liners, definitely worth the watch.)
A NEW BEGINNING
But recently, Stockton has seemingly turned a new leaf, and suddenly found itself making headlines for all the right reasons:
- Stockton-Lodi Ranks No. 4 on top market list for 2018
- Council Takes Key Step On Plan For Downtown
- Stockton Is Launching The First US Experiment In Basic Income
- 47 Arrested In Massive Gang Sweep To Clean Up The Streets
- Home Prices Nearly Doubled In This Surprising California City
- Stockton's Hot Housing Market May Spill Over Into Downtown
And the list goes on and on... but pay particular attention to that last one...
If you read in my article above about investing in Stockton I wrote nearly a year ago, I predicted that Stockton would really need to focus on its downtown area to attract Bay Area millennials who are trying to flee the expensive *** housing market there where only 25% of homes are priced under $500,000.
And it seems Mayor Michael Tubbs must've stumbled onto my post and read it (or at least I like to think so) because big moves are happening with Stockton's Open Window Project.
From the first page of the report (pay special attention to sections I emphasized):
"The ‘Open Window Project’ (OWP) Master Development Plan (MDP) for Downtown Stockton proposes to create the framework, urban design standards and guidelines for the urban regeneration of the heart of the City transforming it into a vibrant, mixed use, mixed-income, pedestrian friendly neighborhood.
The MDP envisions transforming 11.884 net acres on 51 individual parcels over 15 city blocks into a dense urban environment with as many as 1,400 new dwellings together with retail stores, live/work lofts, and work spaces. A range of housing types are envisioned including low and mid-rise stacked flats, townhouses, lofts and microunits offering a variety of choices to cater to different lifestyles and household sizes
The MDP proposes to take advantage of the proximity to transit to reduce the need for car ownership and to create opportunities for a walkable neighborhood. Design guidelines are intended to create permeable blocks and to encourage the creation of a network of privately owned pedestrian alleys, mid-block lanes and courtyards. Streets are to be designed to promote traffic calming and bicycle use together with the design of shared space for activities such as a farmers’ market. The MDP also proposes to create a sustainable urban environment that is responsive to climate change, storm-water management and can encourage programs such as urban farming, green roofs and bioswales."
Let me run some of those phrases through my nifty Millennial Translator 5000 and tell you what they mean...
"Dense Urban Environment" = Come get the big city feel without the big city price, because we know you're broke
"Pedestrian Friendly Neighborhood" = Why own a car when you can just Uber or be extra cool and ride a bike?
"Farmer's Markets" = Farmer's Markets?!? DEFINITELY! I'll bike on over as soon as I finish combing my ironic hipster mustache.
Whoever is in charge of this development is VERY smart, and knows they will attract millennials by the truckload migrating from the Bay Area seeking out more affordable pastures. Kudos to the new Stockton leadership. Big things ahead.
MY BOLD PREDICTION FOR 2018
Last year, Sacramento held the #4 spot predicted by Realtor.com, and Stockton/Lodi has now jumped up from #28 predicting 4.55% sales growth and 6.43% appreciation.
The reason for Sacramento's growth last year was that it was a much cheaper alternative to the Bay Area, and it had a new bustling downtown/midtown scene.
Hmmm... why does that sound so familiar? What other Central Valley City could be brewing the same recipe for massive growth?
I'm telling you, as soon as Bay Area millennials catch wind that they can come to Downtown Stockton and do all the hipster **** they loved to do back in the Bay Area like go to the local farmer's market and check out the new gastropub, and then find out that 89.71% of homes are priced under $500k compared to the Bay Area where only 25% are, they will be moving here in droves.
JUST LIKE THEY DID TO SACRAMENTO LAST YEAR!
Here's the thing folks... you're watching history repeat itself, and it just happens to be happening so rapidly that you can actually do something about it this time and capitalize. Very rare opportunity indeed.
And sure, some will come in here and poo-poo all over this idea once again, talking about how Stockton is a tertiary market, we're at the top of the market, the bubble is about to burst, and so on and so on...
But remember, they said the same thing about Sacramento, too...
If it were me, I would take the gamble on Downtown Stockton, develop some millennial bait with some cool lofts or something and maybe a few high tech features in the home, and ride this development wave out and watch the property values skyrocket.
Or you could always just buy that turn-key property you've never seen in some far away state and hope you don't get screwed over by the developer like a reader of my weekly newsletter just did... but that wouldn't be very wise now would it?
The choice is yours... but the educated choice would be to look at what just happened in Sacramento last year and use it as a blueprint for what's about to happen in Stockton. Hopefully you'll listen.
For I'd hate to be the one to say "I told you so..." ;-)
