Sacramento, CA Real Estate Market Trends & Analysis [Updated 2020]

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The Sacramento real estate market owes a great deal of its recent success to its neighbors to the southeast. As two of the hottest markets in the country, the success seen in San Francisco and San Jose has started to spread to other cities in Northern California, not the least of which includes Sacramento. As a result, real estate in Sacramento has increased in value without sacrificing any demand. In fact, the Sacramento housing market has seen an influx of interest, as the California capital remains considerably more affordable than its nearby counterparts. The unique combination of demand and increases in local home values should serve Sacramento real estate investors well, at least for the foreseeable future.

Sacramento Real Estate Market 2020 Overview

  • Median Home Value: $362,400

  • 1-Year Appreciation Rate: +7.9%

  • Median Home Value (1-Year Forecast): 0.0%

  • Average Days On Market (Zillow): 44

  • Median Rent Price: $1,795

  • Price-To-Rent Ratio: 16.82

  • Unemployment Rate: 3.8% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 1,552,058 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $63,902 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 8.93%

  • Foreclosure Rate: 1 in every 2,352 (4.2%)


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2020 Sacramento Real Estate Investing

The greatest thing the Sacramento housing market has going for it at the moment is its close proximity to both San Jose and San Francisco. As the considerably more affordable alternative to its neighbors, the state’s capital has seen an increase in buyers seeking refuge from otherwise outrageous prices. As buyers flee the likes of San Francisco and San Jose, the city has become a safe haven for those with a more modest budget. In fact, it’s most likely the short distance between these two cities that helped land California’s capital on Realtor.com’s latest Hottest Markets list. As recently as last year, the Sacramento real estate market was considered the nineteenth hottest market in the country, up five spots from the previous year. Sacramento real estate investing, as a result, should be able to capitalize on the latest improvement in rankings. The increased demand, in particular, should bode well for anyone who is able to acquire any of the distressed properties discussed above for a discount. Real estate in Sacramento could become a commodity in the coming year, and investors looking for a deal could keep their eyes open and funding opportunities within close range.

2020 Foreclosure Statistics In Sacramento

The number of new foreclosure filings in the Sacramento real estate market has retained a steady downward trend. As recently as March, “the number of properties that received a foreclosure filing in Sacramento, CA was 24% lower than the previous month and 0% higher than the same time last year,” according to RealtyTrac.

Due to the unique circumstances created by the Coronavirus, however, the neutral change in year-over-year foreclosures may soon change. While foreclosures were on the decline for quite some time, there’s a good chance we’ll see an increase in the coming year. In the meantime, government assistance programs are expected to keep delinquent homeowners in their homes, but mortgage obligations will need to be made current sooner or later. When banks collect, those that aren’t able to keep up with payments (which may be compounded with past payments) may need to file for foreclosure. Therefore, there’s a chance the Sacramento real estate market will see an increase in foreclosures when all the dust settles.

Of the currently distressed homes in the Sacramento housing market, bank-owned homes saw the biggest year-over-year decline. Dropping 72.4% from this time a year ago, bank-owned homes now represent the smallest fraction of foreclosures in Sacramento, with just 6.3% of all distressed homes being of the bank-owned variety. The largest majority of distressed homes in Sacramento, however, haven’t even been foreclosed on, but rather are at risk of foreclosure. Otherwise known as pre-foreclosures, 64.6% of the distressed properties identified by RealtyTrac are simply at risk of falling into foreclosure. Despite their ambiguous status, however, pre-foreclosures represent a great opportunity for Sacramento real estate investors, which begs the question: Where should I invest in Sacramento?

Here’s a list of the neighborhoods with the highest distribution of distressed properties in Sacramento:

  • 95832: 1 in every 650 homes is currently distressed

  • 95838: 1 in every 1,083 homes is currently distressed

  • 95842: 1 in every 1,695 homes is currently distressed

  • 95828: 1 in every 1,698 homes is currently distressed

  • 95815: 1 in every 1,704 homes is currently distressed

2020 Median Home Prices In Sacramento

With a median home value of $362,400, the average price of real estate in Sacramento is about $115,000 more than the national average. It is worth noting, however, that while real estate in Sacramento is more expensive than the majority of the country, it’s considerably cheaper than some of its closest neighbors: San Francisco and San Jose to be exact. In fact, the city boasts a median home value that is merely a fraction of San Francisco ($1,447,191) and San Jose ($1,073,255). Nonetheless, it’s the capital’s close proximity to these cities that has facilitated the latest increase in prices.

According to NeighborhoodScout, the following neighborhoods in Sacramento are responsible for the city’s largest appreciation rates over the last 20 years:

  • City Center

  • Stockton Blvd / 22nd Ave

  • 14th Ave / Martin Luther King Jr Blvd

  • L St / 7th St

  • Power Line Rd / W Elkhorn Blvd

  • 14th Ave / Stockton Blvd

  • E St / 16th St

  • Y St / Broadway

  • Oak Park

  • P St / 16th St

While house prices go down in Sacramento? After all, the median home value in the Sacramento real estate market was expected to continue increasing as recently as last month. However, it looks as if the Coronavirus will delay any immediate gains. While it’s too soon to tell what the latest impact the Coronavirus will have on the economy, most experts expect a temporary dip in appreciation rates in the coming months. Prices are expected to drop for the foreseeable future, but they will likely return to today’s levels with the year. The Sacramento housing market could be home to some relatively affordable deals in the coming months, which begs the question: Is Sacramento a good place to invest? The answer is simple: yes. Real estate in California is incredibly hot at the moment, and Sacramento is no exception. However, each investor’s exit strategy will determine the region’s viability. If for nothing else, it’s possible to invest in any market (up or down). Sacramento is no exception, and the expected dip in prices could make profit margins look slightly more attractive than the past few years.

Sacramento Real Estate Market: 2016 Summary

  • Median Home Price: $323,700

  • 1-Year Appreciation Rate: 11.2%

  • 3-Year Appreciation Rate: 36.6%

  • Unemployment Rate: 5.6%

  • 1-Year Job Growth Rate: 2.8%

  • Population: 479,686

  • Median Household Income: $55,615

Sacramento Real Estate Investing 2016

Business was booming for the Sacramento real estate market in 2016. The first-half of the year saw home prices rise to their highest level in nearly nine years, while appreciation rates continued to steamroll past the national average. Furthermore, the Sacramento housing market gained support from home affordability, new housing construction and the local economy, all of which helped the city evolve to what it is today.

According to Sacramento real estate news, the city experienced substantial gains in the first-half of the year. The median home price was $323,700 during the second quarter, compared to the national average of $239,167. One-year appreciation rates were 11.2% compared to 4.9% achieved by the rest of the country, while three-year rates skyrocketed to 36.6% compared to 17.8%.

Along with flourishing home prices and appreciation rates, the local economy was strong. Employment held up, as one-year job growth reached 2.8% during the second quarter, compared to the national average of 1.9%. Although unemployment rates were higher than the rest of the country in the second quarter, the local economy was stronger compared to other markets.

Homeowners paid 13.9% of their income to mortgage payments during the second quarter, whereas the national average paid 15.8%. Home affordability for the Sacramento housing market improved in the second quarter of 2016, making it one of the more affordable markets in the country. On that note, new housing construction was on the rise, which could further enhance local affordability.

Sacramento Real Estate Market: 2015 Summary

  • Median Home Price: $268,700

  • 1-Year Appreciation Rate: 7.3%

  • Unemployment Rate: 6.2%

  • 1-Year Job Growth Rate: 2.0%

  • Population: 479,686

  • Median Household Income: $57,027

Sacramento Real Estate Investing 2015

Prices in the Sacramento real estate market experienced every end of the spectrum from 2008 to 2015. The onset of the recession saw record lows, and recent appreciation rates all but erased the drop in prices. Real estate appreciated by as much as 64.6% in the previous three years. It wasn’t until the end of 2015 that the pace of appreciation started to temper, and even then, it is still higher than the national average.

At $268,700, the median home price was about $60,000 more than the national average at the time. Homes in the Sacramento housing market were appreciating at a rate of more than 64.0%. That is significant, considering it was on the heels of the housing crisis. Homeowners were automatically reintroduced to equity they thought they had lost.

Sacramento real estate investing saw the amount of available foreclosures diminish by 2015. According to RealtyTrac, just under 40.0% of all Sacramento foreclosures were considered to be “pre-foreclosures.” At 39.4%, pre-foreclosures were down from the previous month and nearly 30.0% from the previous year.

Sacramento County Map:

Map of Sacramento neighborhoods

Sacramento Real Estate Market Summary

The recent success of the Sacrament real estate market is due, largely in part, to the unparalleled success of its neighbors. San Jose and San Francisco are simply too overpriced for many people to call those areas home, which has forced prospective buyers to turn their attention to Sacramento. As a result, real estate investors who can cater to those coming to their city from its more expensive counterparts could be in for a good year. Not only is demand expected to increase, but so too are home values and opportunities.

Have you thought about investing in the Sacramento real estate market? If so, what are you waiting for? We would love to know your thoughts on real estate in Sacramento in the comments below.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either expressed or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.
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