Sacramento, the capital of California, is emerging as a prime destination for homebuyers seeking the perfect blend of affordability, culture, and economic opportunities. However, navigating the Sacramento housing market can be a challenge, particularly for first-time buyers. In this comprehensive guide, we’ll explore the 2024 Sacramento housing market and discuss factors like declining mortgage rates, changing demographics, and expected housing inventory stock.
We’ll also address the city’s unique affordability landscape and provide practical solutions from JVM Lending, along with expert tips to help you navigate the housing market in the Sacramento metro area.
Sacramento Housing Market Forecast 2024
As we step into 2024, the Sacramento housing market remains robust, and the demand for housing remains competitive. Mortgage rate lockdowns have kept inventory levels low as sellers do not want to sell and lose their low mortgage rates and take a higher market interest rate on a new home. This has led to a hotter-than-expected seller’s market in which buyers are competing for the fewer listings available to them regardless of the higher mortgage rate environment.
Demand also grew in the area, further putting upward pressure on prices, due to the influx of buyers from the San Francisco Bay Area seeking refuge from high prices. Sacramento’s allure lies in its vibrant culture, economic prospects, and relatively more affordable housing options compared to its coastal counterpart.
Finally, while Sacramento has areas of fast-paced growth and new home development, the supply of new homes still severely lags behind the growth in demand. Ultimately, this supply-and-demand imbalance buoys prices despite the fast-paced rise in rates.
Navigating the Housing Market In Sacramento
Navigating the housing market in Sacramento can be a rewarding experience with the right guidance. Start by enlisting the assistance of JVM Lending, who will help you identify all of the loan options you can qualify for and which will help you maximize your purchasing power and competitiveness. Once you are pre-approved, JVM Lending will help get you in touch with a local real estate agent who possesses an in-depth understanding of the Sacramento housing market. With this expert team on your side, you can find affordable homes that match your needs.
When you’re in the market, be prepared for competition, as multiple offers and above-asking-price sales are common occurrences in the Sacramento housing market today.
To enhance your chances of success, secure pre-approval for a mortgage from JVM Lending first, as our fast-closing timeline and expert pre-approval knowledge will ensure you can write a competitive offer with complete confidence.
Comparing Renting vs. Buying In The Sacramento Housing Market
The decision between renting and buying in the Sacramento housing market presents a familiar dilemma for first-time homebuyers.
Renting offers flexibility and short-term affordability, with landlords assuming responsibility for maintenance and repairs. However, renters miss out on building equity, and their monthly payments do not contribute to a long-term investment. Keep in mind that all of your housing payments are always paying for a mortgage – either a landlord’s or your own.
Conversely, purchasing a home represents a long-term investment with greater stability and the potential for a return on investment upon resale. Homeowners can accumulate equity over time and have control over property modifications. However, buying a home requires higher upfront expenses, and comes with the responsibility for maintenance and repairs.
The general rule is that renting will be cheaper in the short run. But, over the long run, homeowners average a 40x higher net worth than renters, with a large part of that net worth coming from the equity in their homes.
New Construction In The Sacramento Housing Market
For homebuyers in the Sacramento area, including homebuyers in Sacramento County, Placer County, Yolo County, and El Dorado County, new construction presents an enticing option as these areas are known to have new developments cropping up. This provides some pricing relief for home buyers, as it brings a bit more balance to the askew supply-and-demand dynamics that characterize the Sacramento housing market today.
The appeal of a brand-new home is obvious – new amenities, control over aspects of the design, energy-efficient options, solar panels, etc. From a longevity perspective, you will have more peace of mind and less maintenance compared to an existing home.
Some critiques may be that newly developed areas lack some of the character found in older communities, and there may be fewer local touches nearby.
The process of purchasing a new home is like purchasing an existing home—it is wise to start with a pre-approval from JVM Lending so that you understand your budget, monthly payments, and what sort of closing costs to expect.
The big difference is that the timeline can be extended. In some cases, the homes have already been built and are just waiting for someone to move in. In most cases, the homes are sold before they are built, so you may have to wait several months for them to be ready. In this latter case, we may not be able to lock in your interest rate if the completion date is more than 90 – 120 days out. So, waiting to lock in a rate exposes you to market volatility and interest rate risk – meaning that if rates rise during the new build period, your payments may increase even if nothing else has changed about your financial profile.
Once the home is built and completed, a final appraisal of the property is completed, after which your loan can be funded, and you officially become the new owner.
Ultimately, there are many things to consider when purchasing a new home in Sacramento, but having a partner like JVM Lending on your side will help make the process easy and seamless.
The Future Of The Sacramento Housing Market
Our best prediction is that the Sacramento housing market will remain desirable and hold strong, as it provides more affordable options compared to the other Northern California metropolitan areas. The steady growth in housing supply also bodes well for new entrants into the housing market, as it provides options and helps bring balance between buyers and sellers.
In addition to housing supply, Sacramento’s vibrant art and food scene (as the home of the “farm to fork” movement), desirable geography nestled an equal distance from the mountains and the ocean, and strong economic prospects will keep the housing market a wonderful option for both buyers and sellers in the future.
Contact JVM Lending today to explore your options in the Sacramento housing market at (855) 855-4491 or [email protected]. Your dream home in Sacramento awaits, and we’re here to help you find it.
