Sacramento Real Estate Investment Boom
Sacramento is Hot! And I'm not just
talking about the weather. The real estate market is white hot, and there's a
lot of good reasons. Look out Las Vegas, Sacramento is set up to be the next hot
region for real estate investment.
Whether you are just beginning in real estate
investment, or an expert investor, you can make money investing in some of the
most beautiful and relatively affordable property in the nation. And best of
all, its California Real Estate! Some of the most valued property in the
USA.
The World knows California for so many
wonderful things; Hollywood, Disneyland, Beaches, Mountains, Deserts.
There's the Bay, Yosemite, Redwoods, The Silicon Valley, which, by the way, is
some of the most valuable property not only in California and the United States,
but the World.
It has some of the most beautiful and desirable
coastline; From the warm Southern California beaches to the cool, crisp, rocky
Northern Coast. San Diego, L.A., Santa Barbara, Pismo Beach, Carmel, Monterey,
San Francisco, Mendocino.
And the literal heart and mind of California is
Sacramento. Hidden in the shadow of so many great attractions to a great and golden state is this little river city so vital and vibrant, modest and
regal, soft and spectacular, all at the same time.
What makes this simple city so special, you ask?
And why would I want to invest in Sacramento real estate? Let me explain.
First of all, it is so perfectly located
within California as to be within a two hour drive to some of the best
attractions in California, and a half a days drive to many others. You can be in
Lake Tahoe skiing in the morning, and in San Francisco for Dinner.
The Greater Sacramento Region consists of
seven counties, which includes:
Sacramento County
Placer County
El Dorado County
Sutter County
Yuba County
Nevada County
Yolo County
Each one of these counties has an outstanding
location with a high quality of life for all its inhabitants. Each county also
has its own growth and terrific opportunities for investment, both commercial
and residential.
There is a high quality lifestyle in
Sacramento. Affordable housing can buy you a much bigger, newer house than
in other areas. We have quality Indian Casinos in Western Placer County, which
is the Gem of the Sacramento Region.
The job market is strong. Sacramento is
the State Capitol, so politics and government abound. The support structure for
this activity affords a great service market. There are also several
high-technology corporations in Sacramento like HP, Apple, NEC and Aerojet. In
Sacramento they can afford more warehouse and manufacturing space than most
other locations in the state.
It is a central hub for both North/South and
East/West transportation. There is a large rail and carrier presence in
Sacramento Metropolitan area. Major Freight carriers are located here for many
of the same reasons.
There are great schools and universities.
Cal State University at Sacramento (CSUS), UC Davis, known for its outstanding
life sciences, engineering and medicine curriculums. There are numerous
Community colleges: Sacramento City College, American River, and Sierra College
to name a few. And the recently opened William Jessup University. Other schools
are also considering satellite campuses.
Agriculture is a key component. Sacramento
is located in the heart of the California Central Valley. It has one of the most
productive and fertile locations on Earth. The Port of Sacramento aids
California growers to ship hundreds of thousands of tons of food to the world
each and every year. And of course, you always have the freshest fruits and
vegetable here because they are all grown locally.
It has affordable housing, relative to the rest
of California. You can buy a high quality housing and enjoy the one of the
richest social and cultural environments ever. In fact, much of the phenomenal
growth can be attributed to migrations of families from the San Francisco Bay
Area and the Silicon Valley. With prices so high, many people are forced to move
inland to seek affordable, quality homes.
Basically, the economy is rock solid with a
diverse and productive infrastructure. Along with this virile economy is a
healthy job market, so demand for affordable housing has been outpacing supply
at a record pace.
And the great news is that the Greater
Sacramento Metropolitan Region is forecasted to continue this record growth for
at least the next 5 years!
From an investment perspective, the market
is on fire, with the average property value appreciating at around 17%, with
many doing well over 20% annualized. This puts investors in an excellent
position to profit from buy and hold, as well as fix and flip for the
first-time homebuyer.
There is a lot of flat, undeveloped land ready to
build. Developers are swooping in to snatch up vast amounts of land for
development. I personally believe that there is a huge opportunity here by
simply following the path of development.
There is, of course, development in all
directions from Sacramento Proper. But there are differences. The East is
basically limited by the Sierra foothills. Development is strong in this area,
but limited. The West has growth also, especially in West Sacramento, which has
long been dormant and overshadowed by industrial parks. South Sacramento has
seen the biggest growth in the town of Elk Grove. It is limited ultimately by
the Delta.
But North Sacramento is a huge area just now
being developed. The Highway 99 corridor is soon to become a major artery
between Sacramento and Yuba City. There is ample land for development with no
natural boundaries. It, I believe is the area for large scale development and
the biggest future growth.
There are already world-class developments like
Del Webb Sun City in Roseville and Lincoln California. Elk Grove and Natomas,
Yuba City and West Sacramento. All have tremendous opportunity for current and
future growth.
Real estate all over the US has risen in value
over the last several years as people pulled money out of the stock market
looking for better performing investments. There is no doubt that it will be
worth watching Sacramento in the future.
Interesting choice for a first post. I like how the high quality of life means bigger newer house and Indian casinos. Sorry If I don't think the long commute to San Fran is a high quality of life.
Yes companies are moving out there, but I find it hard to believe that somewhere with virtually unlimited land is going to face a housing crunch. A lot of the money pouring in is from speculators in San Francisco. Also, new home sales are strong, but what about the resale of older homes? The same tracts that were popular 6 years ago, aren't popular now. I am not saying that the market will tank, but you can't cash flow property easily there so all you are betting on is appreciation. Too risky for me.
Hi dstudeba,
Thanks for reading my article and commenting. No need to commute to SF, there is a strong job market within a half an hour's drive of almost anywhere in the SMA.
I guess the Indian Casino thing could have been played down a bit, thanks for pointing that one out. We do have a really nice one here in Placer County though. I was definitely impressed. I even one a hundred bucks! Only been there once though as betting on REI seems a better bet than slots.
The resale homes are also very strong in Sacramento, and the quality of life is not only more home for the money, but the proximity to all the abundant culture and recreation.
You're right that cashflow has not been as good as other areas, but I have found a much better area for cash flow is the Yuba City area about 45 minutes north of Sac. And it is the space in between these areas that I foresee huge growth potential.
Thanks Again for your time. Talk to you again soon.
Deals still exist here in Sacramento, but in my opinion the booms is almost over, not just beginning.
Robert
Thank you for an enthusiastic article but speaking of California RE market, nothing (yet) beets So. California and even South in general, is not a sure thing... Bakersfield for example was "hot insider's pick" for several years now. Due to Alameda Corridor Project, it was expected to become the next gold-mine. Never the less, the RE balloon is about to... well... start leveling off, but for Bakersfield, it didn't happened yet. So not all California is created equal so when it comes to investing in "new hot" markets, I am a bit skeptical.
Anyway, please remind me to cast my vote for you on the next Sacramento's Director of Tourism (or even City Major's) election! You did a fantastic job promoting the central valley region. The region (many believe) will become the next settler's boom due to enormous over-saturation in Southern part of the State; where in only 5 counties including LA, live more then 18mil people.