Relocation from the Bay Area
As full time Realtors, we keep our ears to the ground to notice trends before they turn in to full blown shifts. This info is processed along with our own experiences, and we look to data to quantify it. According to the Greater Sacramento Economic Council, more than 24,000 Bay Area residents relocate to Sacramento every year!
This is a huge influx into our local market, and it’s caused a fair share of issues regarding housing availability, pricing, and demand. Our Sacramento market is small enough that we tend to see trends happening in much larger markets before it hits us, so when prices really started to take off in the Bay Area, we had a pretty good idea that Sacramento home values would also rise.
As the world is dealing with the COVID-19 pandemic, it seems that more and more employees are now working from home. And when you think of the amount of tech-related jobs that are based out of the Bay Area, the proportion of work from homers is skewed up in those regions. The trend of WFH didn’t start with a pandemic though, and as companies have attempted to keep overhead low and employees happy, WFH trends have risen along with available tech to support it. Last summer, Flexjobs reported a 159% increase in remote work since 2005.
Around 2016, us local Sacramento Realtors noticed a migration towards Sacramento of neighboring CA residents from LA, San Francisco, Oakland, and San Jose. This trend was believed to be driven by a lower cost of living in Sacramento, its location to major cities, and a history of local city officials welcoming large tech companies such as Apple, Intel, and Hewlett Packard. If there’s nothing really keeping an employee in one of those larger cities, they have the option to WFH or occasionally telecommute, all while keeping their income as if they were based in a larger market, why wouldn’t they look to a city like Sacramento?
It’s now mid 2020, we’ve been social distancing for nearly six months, and we’re getting more comfortable with the new normal. If you weren’t working from home before, chances are you are doing so now in some capacity. Sales of home office supplies have surged and manufacturers have struggled to keep up with the demand for items such as laptops and web cameras. According to CNN, several large companies are planning on moving forward with WFH as a permanent option—pandemic or not.
New options of working remotely, a lower cost of living, and lower housing costs all seem pretty enticing if you’ve been paying Bay Area prices on everything from groceries to housing. With the flexibility that a company is offering its employees, along with the drastic savings in cost of living expenses, why wouldn’t Sacramento be the perfect target for Bay Area transplants?
The side effects have created an extremely competitive market for home buyers, and a simple supply and demand model is driving prices to near record peaks. When consulting our clients on the current market trends, discussing the supply and demand are usually at the top of our client’s inquiries. There’s several ways to navigate a highly competitive market as a home buyer, and you’d be surprised that it’s not always who can write the highest offer.
Many other strategies exist, and we do our best to help our clients discover these options, connect the dots on what it means to their financial situation, and provide the insight to help them make very important decisions regarding their housing. A big part of our job is consulting at an expert level, and I would encourage you to reach out for a no cost, no obligation consult. Whether you want to know everything real estate from A to Z, or just have a few one off questions, we’re here to help!
