Saturday, December 26, 2015

Want to hit the jackpot in 2016? Double down on Sacramento real estate. (And wait until you hear who’s saying it!)

Don’t listen to us. We’re biased about this real estate thing, being that we’re a real estate agency whose members make their living when people buy and sell their homes. It’s in our best interest to say rosy, optimistic things about the Sacramento real estate market, like when we predicted (VERY conservatively) solid 6-8% home equity gains in the greater Sacramento area over the next year with many markets hitting double digits, or when we reported that the Fed rate hike was just a innocuous blip on the national housing market’s radar.

But this time, you may want to listen because it’s not us saying this and if they’re right, Sacramento real estate will be a downright hot commodity in 2016 – one of the hottest markets in the entire country. If they’re right, you’ll want to go ALL IN on Sacramento real estate in 2016.

That’s the findings of a comprehensive economic forecast released this week by Realtor.com that listed the 10 up-and-coming metropolitan markets in the country. Realtor.com, the preeminent resource for everything housing, published the findings of their data and analysis by Chief Economist John Smoke.

Their opinion of California’s Queen City was that it would be one of the top ten real estate markets in 2016. In fact, Realtor and Smoke had Sacramento listed as the number four most up and coming real estate marketing in the country, behind only Providence, Rhode Island, St. Louis, Missouri, and San Diego, California.

Sacramento sat number four on the impressive list “where home buyers and sellers are the most motivated and active” according to Smoke and Realtor.com, with Atlanta, Georgia, New Orleans, Louisiana, Memphis, Tennessee, Charlotte, North Carolina, Virginia Beach, Virginia, and Boston, Massachusetts filling out the rest of the top ten.

Top 10 Real Estate Markets to Watch in 2016
            1          Providence, RI
            2          St. Louis, MO
            3          San Diego, CA
            4          Sacramento, CA
            5          Atlanta, GA
            6          New Orleans, LA
            7          Memphis, TN
            8          Charlotte, NC
            9          Virginia Beach, VA
            10       Boston, MA

To calculate these ten real estate jackpots, Realtor.com accounted for past trends, season variations for housing, and comprehensive economic data for every one of the 100 largest metropolitan markets in the country. Their statistical model further factored home sale and statistics, then spitting out a list of predicted future values for the coming year. They highlighted those markets where forecasted growth was equal to or better than the U.S. average, and voila…had their top ten.

In fact, Sacramento as well as the other nine markets on the list have real estate that’s in high demand, defined by 60% more listing page views than the U.S. overall average and inventory that sells 16 days faster than the U.S. average.

So why are we basing our advice to double down on Sacramento real estate on the recommendation of just one website, no matter how respected and diligent it is? Not at all. After Realtor.com released their findings, some of the biggest and most venerable media outlets and financial analysts parroted the prediction that Sacramento would come up all cherries, many of them including it in the top ten on their own lists, albeit based on a different combination of data and factors.

Here is a list of sources that either backed up Realtor.com’s placement of Sacramento in the top ten, or coronated the Queen City with their only list:

CNBC
CNN Money
Inman News
Money Talk News
Realty Today
Home Buying Institute
Housing Wire
And even a national real estate website that starts with a ‘T’ and rhymes with ‘Rulia’ backed up Sacramento’s top ten status.

All of these websites/news outlets pointed to a combination of surging demand based on growing household formation (Gen X’ers moving up and Millenials moving in), a surging job market, low unemployment numbers, and other key indicators. As far as I can tell, their statistical models don’t even factor in the Sacramento X Factor – the rise of downtown redevelopment around a new arena.


Either way, it seems Sacramento is in being lauded as one of the hottest real estate markets in the country for 2016, definitely worth doubling down for residents and investors. But by all means, don’t just take our word for it.

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