The market for luxury real estate is surging in Sacramento, as the region’s booming real estate industry pushes up prices, exacerbating a housing affordability crisis in some areas.
The market has been in a state of flux for months, with a surge in interest from both residential and commercial buyers, according to the realtor-in-chief for Sacramento, who spoke on condition of anonymity because he was not authorized to discuss the market.
“There are more buyers now than ever before.
And there’s also a lot of pent-up demand for this area,” said Michael Littner, who is the Sacramento real estate broker.
“There’s a lot more buyers and sellers and a lot less supply than we would like.”
The demand for Sacramento realtors and other agents, who are required to obtain a state license to sell real estate in California, has jumped nearly 50 percent in the last year, according the realtor-inchief, with buyers seeking out more affordable housing options and those looking for a more diversified portfolio of properties.
While prices have soared in Sacramento and across the state, they remain among the lowest in the country, far below the market in New York City, said John Miller, president of Miller Real Estate Group.
“But it’s a good thing to have.
We have a really strong supply, and we’re seeing more demand,” Miller said.
Realtors are not alone in seeing a boom in interest.
The number of sales at brokerage houses and other large real estate brokers has increased significantly over the past year.
The average sale price of a single-family home in Sacramento in August was $1.3 million, according an analysis by the Greater Sacramento Partnership, a nonprofit that supports affordable housing.
That’s up from $858,000 a year ago.
A shortage of space for apartments and townhouses in some neighborhoods is also an issue.
The median house price in the city is $1 million, but the median rent for a one-bedroom apartment is $2,500, according data from real estate data company Trulia.
There are no listings for a single family home in the Sacramento area.
“We’re seeing an increased number of people looking to rent and that’s a very good thing,” said Matt Miller, chief marketing officer at Real Estate Board of California.
“It allows for more affordable homes to be built.”
A shortage for housingThe demand has been fueled by the state’s new $15 minimum wage law, which will kick in Jan. 1.
The $15 wage is expected to lift the incomes of more than 300,000 people who earn $75,000 or less.
The law is expected add nearly $1 billion in economic activity in Sacramento each year, creating a strong economic stimulus for the region, said Joe Filippi, director of the state economic development agency.
“We can’t ignore that,” he said.
The increase in demand is fueling the prices of some properties, which has made some buyers uneasy.
“People who have not been able to afford a property, or are looking for the cheapest, can now buy a house,” said Jason Deere, owner of Deere Real Estate in a statement.
Deere said sales in its Sacramento office are up 10 percent since January, with about $10 million of new sales this month.
A spokesman for the company said it’s also seeing a surge of interest in apartments.
Sales have been booming in the region for years, said Littnersson, but he doesn’t expect that trend to change anytime soon.
“The economy is strong enough,” he predicted.
“This is an economic recovery.”
Sales in Sacramento are up nearly 50% in the past 12 months, according realtor Littersson.
“That’s not a bad indicator of the economy,” he added.
Littnersonson said that a shortage of rental housing has created some concern in some communities, with some neighborhoods in Sacramento facing increased rent increases.
He said he has seen landlords push up rent in some parts of the city.
The Sacramento area has been hit particularly hard by a shortage in housing, he said, with rents up more than $1,100 per month in several neighborhoods, including North Sacramento, South Sacramento and West Sacramento.
While a shortage for rental housing is not a problem for everyone, Deere said it can be challenging for those who want to move out of the area.
“Rental housing is a very high-cost investment, and the amount of money that’s being spent to create rental housing can be a barrier for some people who have no other options,” he explained.
The demand also affects local businesses.
The economic impact of the housing boom in Sacramento is likely to be felt by those who run the local real estate business.
“As a result of the shortage in rental housing, there is a decrease in demand for local realtives,” said Chris Daugherty, a regional real estate