The Sacramento housing market remains affordable, housing experts say, despite a recent report that lists the area as one of the most unaffordable places to live due to new homes being built.
The report, published by real estate company Knock, claims a household income of $128,000 is needed to adequately afford a new home being built in the Sacramento, Arden-Arcade and Roseville areas. The median household income in the Sacramento area is roughly $77,000 and the median price for a new home built in the region is $650,000.
The report did not include resale homes, which is a larger makeup of the housing market. According to real estate company Redfin, the median listing price for a ‘resale’ home in Sacramento is roughly $450,000 and the region is listed as “very competitive.”
The Arden-Arcade area is also listed as “very competitive” and the median listing resale home price is roughly $440,000. The average resale home price in Roseville is listed at roughly $615,000 and is considered even more competitive than the Arden or Sacramento regions, according to Redfin.
Experts say even though new homes being built are pricing out potential buyers, resale value for homes in Sacramento remains competitive and fair.
KCRA 3 financial expert Kelly Brothers said Knock’s report doesn’t really present the full picture when it comes to Sacramento’s housing market.
“Remember: A lot of the people buying new homes are transplants, coming from other areas, specifically the Bay Area and many of them will continue to work either remote, or semi-remote and their salary numbers are probably higher than the median number in Sacramento,” Brothers said. “The numbers aren’t quite keeping up with the actual dynamic of the housing market, still, it is a pretty penny for a new home in Sacramento, no doubt about it.”
Brothers said that’s precisely why people from the Bay Area are looking to buy in Sacramento, because they can get a much larger house, for a much lower price given their higher median income. A unique element that was not considered in Knock’s report.
Sacramento area realtor Kevin McDonald says for those who currently reside in the area and are looking to buy need not be discouraged by this report or the current state of the housing market.
“I feel that it is very affordable in relation to what the income levels are,” McDonald said. “We’re in this mode where people can still afford homes in our region. The rent that’s being charged out there right now because of lack of inventory is causing people to go to the new home market, and/or the resale market.”
McDonald said the area itself is still competitive and demand, for now, remains low.
“This region is incredibly desirable, because of not only schools but quality of life, the restaurants that are coming in,” he said. “You’ve got the Golden 1 Center and so many other things going on. We’re very close to Tahoe and very close to the Bay Area.”
The report highlights how Sacramento residents’ median income required to purchase a new home is lagging way behind. That’s something McDonald said will change, as median incomes in the region will rise and eventually catch up with where housing prices are right now.
Source: https://www.kcra.com/article/experts-sacramento-housing-market-affordable-supply-low/38149403
