Although the housing market is hot, there are still many challenges that a buyer may face with the limited inventory. Homes priced below 250K are the most in high demand for several reasons. You have anyone from the local investor, owner occupant financing, Bay area investors, and owner occupants, to large funds buying everything up in that range and renting the homes out. It seems everyone has recognized that now may be the time to buy and hold and or just to BUY. In the lower price range, an investor can still see a good return on their investment, making it challenging for owner-occupants to compete if they are financing. Areas like Natomas, Elk Grove, Rancho Cordova, Citrus Heights, there are nice-sized homes with at least 3 bedrooms and 2 bathrooms with around 2000 sq. ft. There are many short sales in this price range, accompanied by an occasional equity seller. Be prepared for multiple offers and having to potentially pay over list price to get the home.
As you get above the 300K mark, the market is still very competitive, but is less saturated by investors. The "Core" areas of Sacramento are always going to garner a higher price per square foot than the surrounding areas that have been developed over the last 20 years. Niche markets like East Sacramento are very high in demand and are seeing a pretty steady climb in values. The average price per sq. foot in 95819 this time last year was right around 230, and now we are floating between 270-310, depending on the amount of sales. If you take an even closer look and you target specific neighborhoods within East Sacramento, like the Fabulous 40', you will see a large discrepancy in the price per sq ft. 11 homes sold over 800K in 95819 so far this year, and of those, only 7 were over 1 million. Most of these properties are in the 450 per sq. foot range, and a couple of homes actually got in the 520-590 a sq. ft. range. In an area like the fabulous 40's, each home is unique and well "Fabulous". It is hard to put a price on something that is not replaceable. What does a million dollars get you? Right now, you can choose from a few homes that are all around 3000 sq. ft, 4-5 bedrooms, and 3-4 baths with about .25 of an acre and for the most part updated to the 9s. Great time to buy a luxury property in Sacramento.
