Cailfornia Dreaming 1600SF Home Bay Area 970K Sacramento 420K
By: Ed Fletcher/Capitiol Public Radio
When the pandemic hit, Ebony Lewis decided to reassess her living situation.
“When I was living in Oakland Hills I had a roommate. It was close quarters. I needed my own space,” said Lewis, a Los Angeles-area native who recently bought a home in Sacramento’s Land Park neighborhood.
Lewis is one of thousands of Bay Area residents relocating to the valley during the pandemic because of space and affordability, real estate experts say. The Sacramento housing market was tight before COVID-19, but now …
“The Sacramento housing market is incredibly hot,” said Daryl Fairweather, chief economist with the housing sales site Redfin. “A lot of it is driven by migration out of the Bay Area into more inland areas in the Sacramento area.”
Sacramento home prices are up 14%, houses are selling 14 days faster compared to last year, and they’re going for more than seller’s list prices, according to data analyzed by Redfin.
The impact of Bay Area migration is most pronounced among more expensive homes in the region, said Fairweather. Sales in that segment is up 86%, she said.
“People are moving in from the Bay Area and they’re looking for bigger homes, bigger backyards, more space and extra room to work from home, and all of those homes tend to be at the higher end (of the market)”, Fairweather said. “And a lot of the times are also moving to some of the more expensive parts of Sacramento.”
Placer and El Dorado counties are also popular landing spots for those moving out the Bay Area, Fairweather said.
There is some risk pandemic movers will have buyers’ remorse when life returns to normal, Fairweather said, but given the overall housing picture, it’s unlikely to cause a price bubble.
In response to a continued tight housing market, housing starts are up 18% in the third quarter. Demand still exceeds supply, Fairweather said.
“It’s great that construction is coming on the market, but I think that we’re still playing catch up,” she said.
The average value of those new homes being built is $288,000, a 12% increase over last year, the Redfin data indicates.
Before the pandemic, buyers like Lewis — a young professional working for the Kaiser Permanente group — would have faced a long commute to the Bay area.
But now, there’s no commute.
“All of us are working remotely. We don’t know if we’ll go back into the office,” said Lewis. “If and when we do go back into the office, it will not be as often as it used to be.”