About Marco Santarelli

We will discuss the latest Columbus Ohio real estate market trends & news and find out how they can affect the investors and homebuyers in the latter half of 2021. Columbus is a slowly and steadily growing real estate market that will be thriving well into the foreseeable future. The real estate statistics in Columbus show us that while construction is increasing, inventory is still scarce because of increasing demand. This is leading to a steady year-over-year increase in the Columbus house prices.

Let’s continue to explore the Central Ohio housing market to understand the latest trends. According to the Columbus REALTORS® Multiple Listing Service, the Central Ohio market added 3,336 homes last month, down 1.5 percent from last year and 8.6 percent from the previous month. However, home sales were up 5.0 percent in October to 3,395. At 30,497 year-to-date (January through October), home sales are on track to set a new annual record for the Central Ohio housing market.

High demand coupled with low inventory has driven up prices in many regions, including Central Ohio. According to the Oct 2021 Central Ohio Housing Report, the median sale price increased 8.9 percent to $261,478 and the average sale price was up 8.2 percent in October to $298,473. Year to date, the average sale price is $298,730 and the median sale price is $260,000, up 12.9 percent and 12.6 percent respectively.

Roughly one in four homes (23.8 percent) were cash transactions in October. Of those buyers that financed their home purchase, 58.4 percent used conventional financing, ten percent used FHA financing and 4.8 percent secured a VA loan. It took an average of 15 days to sell a home in October. More data from the realtors shows that for the first ten months of 2021, homes have sold in an average of 16 days.

Average days on market by price segments (October):

• Homes under $350,000 sold in an average of 13 days.
• Homes sold between $350,000 and $500,000 took about 15 days to sell.
• Homes in the $500,000 to $700,000 price range sold in an average of 21 days
• Homes over $700,000 were on the market for an average of 32 days.

Columbus Ohio Housing Market Prices & Forecasts 2021-2022

We shall now discuss some of the most recent Columbus real estate trends and compare them with the past year. We shall mainly discuss median home prices, inventory, and growth, which will help you understand the way the local real estate market moves in this region. Columbus is also one of the hottest real estate markets in the nation. Columbus real estate has appreciated 65.05 percent in the last ten years, for an average annual home appreciation rate of 5.14 percent. This puts Columbus in the top 20% nationally for real estate appreciation.

Homebuyers looking for a reprieve from the Columbus' heated housing market are unlikely to find one next year, according to a Realtor.com projection. The listing service ranks Columbus as the fifth-hottest housing market in the country for 2022, forecasting that house sales and asking prices will increase twice as quickly as national rates. Demand for homes in the Columbus area will continue to be strong due to their affordability, immigration into the city, the area's high proportion of millennials, and the region's excellent job growth and schools.

The median list price of homes in Columbus, OH is $229.9K, trending up 12.1% year-over-year. The median listing price per square foot is $151. The median sale price is $236K. Homes in Columbus sell faster than average compared to other cities in Franklin County. Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Columbus have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 105.38% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher.

• German Village has a median listing home price of $560K, making it the most expensive neighborhood in Columbus
• South Linden is the most affordable neighborhood, with a median listing home price of $115K.

Columbus has a mixture of owner-occupied and renter-occupied housing units. According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Columbus. Other types of housing that are prevalent in Columbus include large apartment complexes, duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 46% of Columbus' housing units.

About 1,856 single-family homes were sold in Oct 2021 in Franklin County. From January to July this year, 17,177 single-family homes have been sold. As compared to 2020, it makes a year-to-date increase of 7.3% in the sale of single-family homes. In Oct, the average sales price increased by 9.6% to $288,895 while the median sales price increased by 11.4% to $252,000.

Below is the latest monthly report of the Columbus Housing Market (Franklin County Area). The source of this report is – “Columbus REALTORS®.” The report compares key housing metrics from October 2021 with October 2020.

• Home sales decreased by 2.5% to 1,856 units.
• Pending sales increased by 5% to 2,047 signed contracts.
• Median Sales Price rose by 11.4% to $252,000.
• The Average Sales Price rose by 9.6% to $288,895.
• The Average Price Per Square Foot rose by 11.4% to $173.49.
• Days on Market Until Sale dropped by 12.5% to 14 days.
• New Listings dropped by 7% to 1,805 homes for sale.
• Total Inventory of Homes for Sale dropped by 14.7% to 1,477 units.

The report shows it is still a strong seller's real estate market with just 0.9 months of inventory left on the market, which is only likely to keep driving prices higher in the near future. Historically, six months of supply is associated with moderate price appreciation, and a lower level of months’ supply tends to push prices up more rapidly. As we move forward the industry is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges.

Columbus Ohio Real Estate Market Forecast 2022

What are the Columbus real estate market predictions for 2021 & 2022? We get to find that on Zillow, the typical home value in Columbus is $216,840. Let us look at the price trends recorded by Zillow over the past few years. Since Dec 2011, the typical home prices in Columbus have appreciated by nearly 106.5%. The prices rose by 17.7% over the last 12 months alone. Last year saw was the eighth consecutive year of home price gains.

Columbus is a hot seller’s real estate market as there exists a limited supply of homes, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers. In other words, the housing demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. There are fewer homes for sale than there are active buyers in the marketplace. According to NeighborhoodScout, the real estate appreciation rate in Columbus in the last quarter was around 2.74%, which amounts to an annual rate of 11.44%.

• The typical home value of homes in Columbus Metro is $266,594, up 16.9% over the past year.
• Zillow predicts they will rise 14.4% in the next twelve months.
• The Columbus metropolitan area consists of the counties of Franklin, Delaware, Licking, Madison, Pickaway, and Fairfield.
• The current population estimate is approximately 1.8 million people.
• Columbus home values have gone up 17.7% over the past year and will continue to rise in the next twelve months.
• Franklin County home values have gone up 17% over the past year and will continue to rise in the next twelve months.

Here is the Columbus real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 14.4% until Oct 2022.

Columbus has been one of the hottest real estate markets in the country for years. It is also one of the hottest real estate markets for investing in rental properties. This market is very much skewed to sellers due to a very low level of inventory that can't meet the demand of the rising population. If buyer demand eases, we could see a positive influence on Columbus' low inventory levels while at the same time seeing a negative impact on sales. Columbus and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term.

In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Columbus can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. Therefore, in the long term, the Columbus real estate market remains strong and skewed to sellers, due to persistent imbalance in supply and demand.

Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment. Currently, the inventory is relatively increasing in Columbus, so buyers should take advantage of scooping up their favorite deals which otherwise are taken away by seasoned investors in the bidding wars.

Columbus Real Estate Investment Overview?

Should you consider Columbus's real estate investment? Many real estate investors have asked themselves if buying a property in Columbus is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2021 & 2022. If you are looking to make a profit, you don’t want to buy the most expensive property on the Columbus real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Columbus that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.

Is it a good time to buy a house or invest in Columbus? Let’s talk a bit about Columbus and the surrounding metro area before we discuss what lies ahead for investors and homebuyers. Columbus, Ohio is the 14th largest city in the U.S. It is home to almost nine hundred thousand people. Forbes reported in 2018 that Columbus is a rare Midwest success story, a “Rust Belt” city that has truly transformed itself and has begun growing again.

It is the only large northern city to grow by more than 10% between 2010 and 2018. Compare this to many northern cities continuing to hemorrhage people, whether they are moving to the suburbs or the south. This makes the Columbus housing market much healthier than Cleveland, Detroit, and smaller Ohio cities from which it has drawn population. The Columbus Ohio real estate market is bigger than many think. Take the suburbs into account, and the Greater Columbus metro area encompasses around two million people. Around 2.4 million people live in the combined statistical area (CSA).

The home prices in Columbus are still relatively low, so if you want to invest in Columbus real estate, then now would be a great time to do so. It is the second-largest metro area in the state. The area is expected to grow by more than 50% over the next 20-25 years. The real estate appreciation rate in Columbus in the latest quarter was around 0.45% which equates to an annual appreciation rate of 1.81%. Even small changes in the appreciation rate can change the long-term value of buying considerably.

Let’s take a look at the number of positive things going on in the Columbus real estate market which can help investors who are keen to buy an investment property in this city. We’ll address the biggest factor pulling people to the Columbus housing market next.

Columbus Real Estate Is Appreciating for Many Reasons

A city that’s losing people is typically going to see property values decline, though desirable neighborhoods may see steady or slight increases in valuation. The Columbus Ohio housing market is seeing steady growth due to slow population growth. Between 2013 and 2020, property values have increased. Over the last year, prices increased by around 17%. This is partially due to the demand for older, renovated homes in established, walkable neighborhoods. The limited supply of family-friendly homes in these areas is driving up their prices.

One interesting factor driving property valuations in the Columbus Ohio real estate market is city tax abatements in downtown neighborhoods. The city is encouraging people to buy up properties and renovate them, whether to rent out or live in themselves. Another point in favor of Columbus is that they didn’t crack down on private rentals like Airbnb. For example, they decided in 2018 not to limit the number of days people could rent their homes out on Airbnb and similar sites.

Columbus is Landlord Friendly

Ohio is rather landlord-friendly, in the same category as Idaho and North Carolina. That makes it much more landlord-friendly than neighboring Midwestern states and far better than Pennsylvania. There are no laws regarding pets, payment grace periods, or re-keying. Interest owed on deposits is modest. Rental agreements are recommended but not required for short leases. There is no statutory limit on late fees but they must be “reasonable.”

Columbus' Sizable Student Market Is a Boon to Investors

Columbus, Ohio is the state capital. This means there are several universities in the city. Franklin University hosts nearly five thousand students. Capital University has about three thousand students. Ohio Dominican University is home to nearly two thousand students. There are nearly 40 colleges within fifty miles of Columbus.

And the sheer variety of colleges in the area means that investors can rent to the large population of students in the Columbus Ohio real estate market without worrying about their property values rising and falling based on the popularity of a flagship school. Between kids attracted to the Columbus Ohio housing market for school and work and choosing to stay to start their own families, the Columbus market enjoys a median resident age of 32.3.

This is seven years less than the median age for the state of Ohio. We can expect the next generation to grow up here to stay, as well, fueling demand for the Columbus housing market. Columbus, Ohio has to compete with many other surrounding cities in the Midwest. However, one point in its favor is the lower cost of living. That attracts residents who earn just as much here as in Chicago but don’t have to pay as much for things. The annual salary is a little less than the national average, but rents and housing are even lower – and much lower than hotter markets like Chicago.

Rental Trend: The average rent for a 1-bedroom apartment in Columbus, OH is currently $825. This is a 3% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Columbus remained flat. The average rent for a 1-bedroom apartment decreased by -3% to $825, and the average rent for a 2-bedroom apartment remained flat.

• The average rent for a 2-bedroom apartment in Columbus, OH is currently $1,100. Compared to last year, the average rent price has remained flat.
• The average rent for a 3-bedroom apartment in Columbus, OH is currently $1,650. This is a 10% increase compared to the previous year.
• The average rent for a 4-bedroom apartment in Columbus, OH is currently $2,095. This is a 10% increase compared to the previous year.

Columbus' Economy Is Healthy

We’ve already mentioned that Columbus, Ohio is considered a “Rust Belt” city that’s unique for a rebound. It enjoys unemployment rates of around 5%, but this is phenomenal compared to the surrounding area. The US saw incomes grow 22% between 2010 and 2016. Columbus metro area incomes grew roughly 25%. The city’s economy is healthy enough to retain many young people and attract some coming here to work, but it isn’t so hot that the bubble may burst. Most of the Columbus housing market growth has been younger people moving there from Ohio. This includes but isn’t limited to those who came for school but decided to stay.

Update: The BLS reported that the unemployment rate for Columbus rose 0.1 percentage points in July 2021 to 5.2%. For the same month, the metro unemployment rate was 0.2 percentage points lower than the Ohio rate. The unemployment rate in Columbus peaked in April 2020 at 13.5% and is now 8.3 percentage points lower.

Columbus' Tax Climate Is Balmy

Ohio’s effective property tax rate is 1.6%. That’s higher than the national average. However, Ohio is better than its peers for real estate owners, since its property tax rates are lower than those in several surrounding Midwestern states. Property tax rates do vary between counties, so you may pay lower property taxes for investment property in the suburbs as in downtown Columbus.

Redevelopment in Columbus

There are at least ten major redevelopment projects planned around Columbus, Ohio. These projects total an estimated billion dollars. Each of these redevelopment projects will increase the demand for homes in the area. In neighborhoods with new luxury condos, shopping, and employers, everyone’s property will be worth more. This allows real estate investors to invest in the Columbus Ohio real estate market in one or multiple locations, depending on their budgets and preferences. Nor do you have to worry about the one multi-family housing unit you bought collapsing in value because the mega-project in downtown was delayed or fell through for lack of funding.

Columbus Investment Properties

Investing in Columbus real estate can be a worthy investment due to a steady rate of appreciation. It mixes smart redevelopment, quality of life, and growth to create a stable, slow-growing market that will be thriving well into the foreseeable future. If you're looking to buy Columbus investment properties, it makes sense to do so when inventory levels are relatively high, like in the current phase of the pandemic.

The surplus of available opportunities can lead to softer negotiations with sellers. Columbus has a lower cost of living than the national average. Good cash flow from Columbus investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Columbus real estate investment opportunity would be key to your success.

The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Columbus investment property and you should be able to get a good return on your investment over the long term. The neighborhoods in Columbus must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls.

A cheaper neighborhood in Columbus might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplex and triplex in Class A neighborhoods. The inventory is low, but opportunities are there.

Homes downtown tend to sell at higher prices than those on the city's south side. There are many neighborhoods to consider for buying properties in Columbus. Properties in Worthington and downtown Columbus have higher than average median home prices, and their relatively low crime rates add additional appeal. Places like Victorian Village, where home prices remain higher than many other places in the city, support a strong local market, and they can signify a lower level of risk. Some of the other popular neighborhoods in Columbus, Ohio are Upper Arlington, North Linden, and Grandview Heights.

Upper Arlington has a median listing price of $450K, making it the most expensive neighborhood. South Linden is the most affordable neighborhood in Columbus with a median listing price of $59K. Even as Columbus's home prices have reached new heights, they are still near to the national average, and the market remains attractive to residential real estate investors. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain. Millennial homebuyers can't outbid real estate investors and hence end up renting.

As with any real estate purchase, act wisely. Evaluate the specifics of the Columbus housing market at the time you intend to purchase. Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Columbus.

Consult with one of the investment counselors who can help build you a custom portfolio of Columbus turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Columbus.

Not just limited to Columbus or Ohio but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Columbus turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

There are many other markets in the state of Ohio for real estate investing. Cincinnati is one of them. The Cincinnati real estate market is on the upswing and looking strong for the foreseeable future. It provides many opportunities for investors, regardless of the market you want to invest in. It is growing faster than the nation as a whole, though this is partially due to its recovery from a low point during the Great Recession. It is recovering home values and growth in cheap markets can yield the greatest ROI.

Cleveland is another good market to invest in real estate. Cleveland is a notable exception to the decline of the Rust Belt cities. It has managed to reinvent itself, shifting from classic manufacturing to biotech and medicine. In the process, it has maintained its population and has strong potential for growth both economically and demographically.

Similarly, you can also consider Akron for real estate investing. It also presents a great opportunity for real estate investors. Akron has been known as the “Rubber Capital of the World” for more than a century. It is home to around 200,000 people. However, the Akron real estate market is much larger than this. Include the suburbs and small towns that surround it, and the Akron housing market contains roughly 700,000 people. The Akron area has hit its low and is starting to appreciate. This is a safer choice than buying in depressed areas that may not recover anytime soon.

Dayton is the sixth-largest city in Ohio. The city is home to roughly 140,000 people. The metro Dayton Ohio housing market includes around 800,000 people. Home values are predicted to go up steadily in the next five to six years making Dayton a great place for real estate investing. The Dayton Ohio real estate market is one of the best deals in the Midwest. It balances affordable properties with strong future growth, a large rental market and stable property values, low carrying costs, and decent ROI.

Let us know which real estate markets you consider best for real estate investing! 

Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

REFERENCES

Latest Market Data, Trends, and Statistics
https://www.columbusrealtors.com/housing-reports
https://www.zillow.com/Columbus-oh/home-values
https://www.neighborhoodscout.com/oh/columbus/real-estate
https://www.rentcafe.com/average-rent-market-trends/us/oh/columbus
https://www.realtor.com/realestateandhomes-search/Columbus_OH/overview

Overview/Demographics
https://en.wikipedia.org/wiki/Columbus,_Ohio
http://www.city-data.com/city/Columbus-Ohio.html

Hottest Housing Markets
https://www.realtor.com/research/october-2019-hottest-housing-markets
https://www.realtor.com/research/toughest-and-easiest-housing-markets-to-find-a-home

Low cost of living
https://realestate.usnews.com/places/ohio/columbus

Rebound
https://www.forbes.com/sites/adammillsap/2018/08/06/columbus-ohio-is-booming-but-will-it-last/#62a10ded25be

Real estate friendly policies
https://www.dispatch.com/business/20180713/columbus-wont-cap-rental-days-as-rules-for-airbnb-type-properties-near-finish-line

Landlord friendly
https://www.avail.co/education/laws/ohio-landlord-tenant-law
https://www.planetizen.com/news/2018/04/98435-which-states-are-most-renter-or-landlord-friendly

Student market
https://www.collegesimply.com/colleges-near/ohio/columbus

Taxes
https://smartasset.com/taxes/ohio-property-tax-calculator

Redevelopment
https://www.columbusunderground.com/the-top-10-columbus-urban-development-projects-of-2017
https://www.dispatch.com/news/20170810/downtown-development-boom-seems-endless-experts-say

The Seattle area housing market's overall slowdown is seasonal and can be attributed to people being priced out of the market combined with a slight increase in interest rates. At the same time, the low inventory and high competition in the Seattle housing market continue to make it difficult for homebuyers to find a place to call home. Increasing single-family home prices have resulted from a widespread housing boom fueled by historically low-interest rates and a scarcity of available properties, making homeownership out of reach for more people.

As the local real estate market takes its usual winter hiatus, home prices in the Seattle area continue to stagnate. In November, median home prices in the Puget Sound region remained essentially unchanged from the previous month. This is typical for this time of year when sales are lower. Last month, the median single-family home in King County sold for $820,000, $695,000 in Snohomish County, and $515,000 in Pierce County. Each county saw a less than 1% change from October. King County’s $820,000 median is up 12.25% from last November. According to new data released Monday by the Northwest Multiple Listing Service, Snohomish and Pierce counties saw even larger increases: 22.8 percent and 15.7 percent, respectively.

As more millennials enter the market, the demand crunch will intensify. From the standpoint of supply and demand, Seattle's housing market is currently one of the most inequitably balanced in the United States. There’s just not enough supply to keep up. Growing demand is expected to continue as a result of a lack of new construction entering the market in suburban areas following years of underdevelopment. With interest rates remaining at low levels and a supply of homes available for sale in the region of less than one month, the perfect storm for rising house prices will continue, albeit perhaps not quite as ferociously as previously.

What you get to see are record-breaking housing prices and record-breaking low inventory. Seattle's housing market is driven by employees of local tech businesses like Amazon and Microsoft, as well as corporations with big operations in the vicinity like Google and Facebook. Many of them didn't want to work remotely in small apartments during the epidemic, so they sought spacious homes with office areas. Most of them have the financial means to compete with other buyers and raise home selling prices.

In 2022, the rate of appreciation is likely to slow significantly from current levels. Prices for single-family homes will climb by over 8% in King and Snohomish counties and by nearly 11% in Pierce County, according to Matthew Gardner, the chief economist at Windermere Real Estate.

According to Realtor.com, King County is an expensive seller's real estate market. The median asking price for a home in King County is approximately $749K, up 8.7 percent year over year. At $760K, the median sale price is even higher. Low-interest rates and continued job growth continue to drive the market. If the Median Listing Price is increasing, the market is likely “hot,” and homes will sell more quickly. When prices increase, sellers will benefit. In September, homes in King County, WA sold for approximately the asking price.

• There are 64 cities in King County.
• Beaux-Arts has a median listing price of $2.5M, making it the most expensive city in King County.
• Des Moines is the most affordable city in King County, with a median listing price of $500K.
• The median list price of homes in Seattle, WA is $750K, trending up 3.5% year-over-year.
• The median sale price is $785,000.
• There are 95 neighborhoods in Seattle.
• Alki Point has a median listing price of $1.1M, making it the most expensive neighborhood in Seattle.
• Lower Queen Anne is the most affordable neighborhood, with a median listing price of $499,000.

According to NWMLS, the market performed well in November despite the seasonal slowdown. This year, fewer buyers are taking a break, and demand continues to be strong. New listings, pending sales, and final sales remained consistent with year-ago levels, but prices increased slightly more than 15%. Their latest report shows that 8,571 pending sales occurred across 26 counties last month, closely equal to the 8,584 mutually accepted offers recorded a year earlier. The 8,976 completed sales represented a small improvement above the 8,875 completed transactions recorded twelve months ago by MLS members (up 1.14 percent).

Twenty of the NWMLS's 26 counties added more new listings in November than a year ago, but with demand outstripping supply in many locations, inventory was depleted. At month's end, there were 4,621 active listings of single-family houses and condominiums in the area, down roughly 29 percent from 6,505 listings a year ago. At month's end, the selection amounted to approximately two weeks' supply (0.51 months), which is still significantly less than the industry's “balanced market” indicator of four to six months. Snohomish (0.24 months), Thurston (0.35 months), King (0.38 months), Clark (0.39 months), and Pierce (0.39 months) had even less supply (0.44 months).

Most counties reported double-digit gains in the median price of single-family homes. King County prices, which are at $740,000, have been declining since July when they peaked at $789,000. Total active listings are also declining, with King County's supply down 60% year over year. The Northwest Multiple Listing Service report indicates that prices in Seattle are almost the same from a year ago: $765,000 for November's closed sales, compared to $760,000 a year earlier. Elsewhere, for example, for the Eastside and Southeast King County map areas, prices jumped more than 26% from a year ago.

We believe prices will continue to rise at a slower pace, but at the same time, it raises concerns about affordability. However, our main focus would be on King County and Seattle housing market trends for November 2021. High demand kept supply depleted. Nov 2021 housing report from “Northwest Multiple Listings Service” found that King County had 1,149 active listings (SFH+condo), a -59.92% decline from the same time last year when there were 2,305 active listings.

An active status means that the home is currently available for sale. It may have received offers, but none have yet been accepted, which means that the opportunity is wide open for you to propose. If you look at the housing supply in the King County area, it has declined drastically and is now at 0.29 months for single-family homes and 0.70 months for condos. It means that at the current pace of sales, all single-family homes would dwindle in less than 3 weeks if no new listings come on the market.

According to NWMLS, the condos are more reasonably priced (median price < $500K) and there are more months of inventory than with single-family homes. Many buyers have been forced into the condo market due to affordability constraints, but inventory is severely depleted for condos as well. So those who are renting should consider condos as an ownership opportunity and a way to build equity in the future. The median-priced condo in King County sold for $460,000. Single-family homes (excluding condos) in King County had a median sales price of $820,000. That is $360,000 more than condos (nearly 78% higher).

Only in the city of Seattle is the extreme inventory shortage subsiding, providing some relief to homebuyers, particularly those looking for condos. In Seattle, pending condo sales increased by 72.57 percent last month. while condo active listings decreased by -52 percent year over year. The housing supply, measured in months of inventory, is 0.41 months for single-family homes (still quite tight) and 1.38 months for condominiums. The median price of single-family homes increased by 3.66 percent to $850,000, while for condos it increased by 0.2% to $500,999.

To summarise the last month's statistics we can say that All King County & Seattle remains a seller's real estate market with only 0.38 months of inventory — still well below what is required to meet the volume of buyers right now. In the current market environment, home buyers are trying to take advantage of low-interest rates, and the local real estate agents are struggling to meet the demand.

According to local realtors, the ongoing combination of low mortgage rates and escalating prices has both buyers and sellers taking advantage of the market. Buyers are finding well-priced homes in good condition, and sellers are seeing many multiple offer situations. With the virus and increased flexible work-from-home options, people can move to suburbs and outer areas in search of value and lower population density. Therefore, buyers are also starting to find homes in the suburbs.

Seattle Housing Market Trends 2021 (November YoY)

Below is the most recent Seattle Housing Market Report released by “Northwest MLS.” The report compares the key housing metrics of the City of Seattle (that is part of King County). For buyers in Seattle, the historic drop in the mortgage rates has been a significant advantage to move forward and scoop up some properties from the market in 2021.

Here are the numbers (RES+CONDO) for November 2021 compared with November 2020.

ACTIVE LISTINGS FOR SALE

• Total active listings in Seattle were 698.
• This represents a decrease of -57.9% as compared to November 2020.
• Total active listings in All King County were 1,149.
• This represents a drop of -59.92% as compared to November 2020.

NEW LISTINGS FOR SALE

• 749 new listings were added to the market by brokers in Seattle.
• This represents a decrease of -13.6% as compared to November 2020.
• 2,068 new listings were added to the market in All King County.
• This represents a decrease of -10.3% as compared to November 2020.

CLOSED SALES

• 1,041 closed sales were registered by brokers in Seattle.
• This represents a year-over-year increase of 4.94%.
• 3,045 closed sales were registered in All King County.
• This represents a year-over-year decrease of -1.71%.

PENDING SALES

• 1,034 pending sales were registered by brokers in Seattle.
• This represents an increase of 12.51% from the same month a year ago.
• 2,791 pending sales were registered in All King County.
• This represents a decrease of -1.93% from the same month a year ago.

MEDIAN SALES PRICE

• Seattle's median sales price increased by 0.66% to $765,000.
• Last year, at this time, the median price in Seattle was $760,000.
• King County's median price increased by 8.03% to $740,000.
• Last year, at this time, the median price in King County was $685,000.

MONTHS OF INVENTORY (MOI)

• 0.67 months represents the number in Seattle.
• Months' of supply in All King County is 0.38.
• 6 months of supply is when you have a balanced real estate market. 
• This shows that this region continues to be a strong seller’s housing market.

Seattle Real Estate Market Forecasts 2022 (Latest Predictions)

According to a Redfin analysis published in June 2021, over 4,500 Seattle-area homes sold for more than $100,000 above the asking price in 2021, a significant increase over the previous year, when only 400 homes sold for more than $100,000 above the asking price. Over 6,300 homes in Seattle have sold for between $25,000 and $99,999 more than the asking price, an increase of nearly 2,000 over the same period last year. Thus far in 2021, the average Seattle-area home has sold for $47,878 more than the asking price. In comparison, in 2020, $3,025 was spent during the same period.

Seattle, despite years of rising home prices, is nowhere near the top of Redfin's list of cities with the highest share of cash buyers. In July 2021, Seattle's median home sale price reached a new high of $795,000, up 7.5 percent year over year, in part due to the high number of homes being bid up above the asking price. 47.4 percent of Seattle properties sold for more than their asking price, an increase of 20.9 percent year over year. In Seattle, the average sale price per square foot is $535, up 14.3 percent from last year. In Seattle, homes sell after an average of seven days on the market, down from eight days last year. In July, 1,455 homes were sold, up from 1,232 last year.

What are the Seattle real estate market predictions for 2021 & 2022? Let us look at the price trends recorded by Zillow over the past few years. For the past 6 to 7 years an extreme drop in inventory led to an astronomical rise in Seattle home prices, as buyers competed over a dwindling number of properties on the market. Seattle has a track record of being one of the best long-term real estate investments in the U.S.

Since Dec 2011, the home values in the city of Seattle have appreciated by nearly 141% — Zillow Home Value Index.  As you can see in the graph given below, the home values increased consistently, starting in late 2012 and continuing through 2018. After that, it marked the beginning of a sustained downturn in prices which lasted for over a year. In 2018, prices took a steep drop. From July 2018 onward the home values started declining and they continued so until November of 2019. The trajectory has shifted from last December to an upward trend.

For the first time since 2014, homes in this area were selling below their listing prices. The current typical home value of homes in Seattle is $874,877. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. It indicates that 50 percent of all housing stock in the area is worth more than $874,877 and 50 percent is worth less (adjusting for seasonal fluctuations). In October 2020, the typical value of homes in Seattle was around $788,000. Home values have gone up 11% over the past year alone.

Similar growth has been recorded by NeighborhoodScout.com. Their data also shows that Seattle's real estate appreciated 110.19% over the last ten years, which is an average annual home appreciation rate of 7.71%, putting Seattle in the top 10% nationally for real estate appreciation. As of now, Seattle prices are up across the board. Condos are still below their peak price, but this is the highest the condo price has been since the peak of 2018. Houses have surpassed the peak breaking records month over month.

During the latest twelve months alone, the Seattle appreciation rate has been 8.58%, and in the latest quarter, the appreciation rate has been at 3.71%, which annualizes to a rate of 15.71%. This figure also corroborates Zillow's positive forecast, so the home prices in this region are expected to increase by at least 7% in the next twelve months. It means that there is a situation in which demand exceeds supply, giving sellers an advantage over buyers in price negotiations. That's how the housing prices increase in a region. The strong price appreciation we saw in 2020 will continue in 2021 as the biggest price boost will occur during to peak buying season.

Realtor.com offered real estate predictions for 100 of the top metro areas in the U.S. Out of those 100 metros, the Seattle metro area was the #5 housing market for combined sales and price growth. They predict that home values within the Seattle-Tacoma-Bellevue metropolitan area would rise by 9.7% during 2021. Their sales forecast is 8.9%. Boise was at #4 with a price growth forecast of 9.1%.

Here is the housing forecast for Seattle, King County, and Seattle MSA. The home appreciation has been incredibly strong over the past year.

• Seattle-Tacoma-Bellevue Metro home values have gone up 21.8% (current = $695,058) over the past year and Zillow predicts they will rise 13.7% over the next 12-months.
• Seattle home values have gone up 11% over the past year and will continue to rise over the next 12-months.
• King County home values have gone up 17.3% (current = $812,129) over the past year and will continue to rise over the next 12-months.
• Pierce County home values have gone up 23.8% over the past year. It is comparatively affordable with a typical home value being $514,593.
• The typical home value of homes in Snohomish County is $688,581, up 29% over the past year.

The chart below, created by Zillow, shows the growth of median home values since 2011 and their forecast until Oct 2022. We will update it when the new data is available.

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? The increase in the number of new and total listings indicates that sellers are now willing to put their homes on the market. People continue to buy and sell their homes, whether they're growing their family and need a bigger place, relocating for a job, or retiring. And the real estate industry has quickly adapted to restrictions due to the novel coronavirus pandemic by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges.

Opportunities abound for both buyers and sellers if they’re willing to act quickly. Sellers, brokers, and homebuyers seem to be adjusting to restrictions imposed on the real estate industry because of the coronavirus pandemic. With the help of agents, buyers are touring properties virtually, on FaceTime, or WhatsApp calls. The constraint on available inventory is making the Seattle real estate market heat up again. Seattle and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term. In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero.

In terms of months of supply, Seattle can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. The pandemic caused some sellers to take a pause which resulted in the Seattle housing market facing even more of a decline in inventory. At the same time, buyer demand remained as before.

The bottom line: The current inventory (months of supply for SFH+condos) in this region remains very tight — 0.67 months in Seattle and 0.38 months in All King County. Therefore, in the long term, the Seattle real estate market remains as strong as always. This housing market is skewed to sellers due to a persistent imbalance in supply and demand.

For buyers in Seattle, the low-interest rates (near 3%) continue to be an incentive. We expect a high number of listings to hit the market in the summers. It’s a positive sign for homebuyers, especially for those to want to invest in Seattle real estate. More inventory leads to more options for buyers and it could potentially lead to more sales as well. 

Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Seattle in 2022 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance. 

Impact of Pandemic on The Seattle Housing Market

By late 2019, Seattle home prices had begun once again to rise. Prices rose faster in October 2019 than they have for a year. In October, Seattle house prices rose 3.3% from a year ago, to $775,000 — the largest percentage increase in 12 months. According to a December 2019 report by The Seattle Times, home prices in the area had posted year-over-year gains for three months in a row. Right from January, we saw very high demand, low inventory, and it looked like that we'd see some appreciation in 2019.

The supply of properties on the market in King County was drastically decreasing, down 40.7% by the end of February, from a year ago. This is an advantage to sellers right since there aren't as many homes to sell compared to normal trends. By January 2020, the Seattle housing market had posted the highest growth in the entire region. Before coronavirus hit, the market was really in good shape. Seattle's housing market was hotter than almost anywhere else in the country.

The 2020 housing market offered a lot of surprises. It was remarkable for many reasons, not the least of which was its extraordinary resolve through the COVID-19 pandemic. Covid-19 pandemic slowed down the volume of sales and the pace of sales in the Seattle area. It caused some fraction of buyers to put off their planned home purchases and a portion of sellers to hold off on listing their homes. Residential real estate activity reflected expected declines during April with the impact of the coronavirus pandemic taking its toll.

Due to falling inventory, the sellers were facing a lot less competition from each other. Many of them decided not to list their homes in the spring season, which led to a heavy decline in listings but kept the prices steady and strong. The Seattle home price was up by 6% in February 2020, from a year ago. Also, there was an increase of 1.3% as compared to January 2020. Data from Northwest Multiple Listing Service showed that inventory remained tight in March as well.

At the end of March, there were 2813 active listings in King County. That was a 34.01% drop from last year when active listings were 4263. Brokers reported 2,450 closed sales for a YOY gain of more than 6.99%. The pending sales (mutually accepted offers) were 3,031, a year-over-year drop of 17.12%. A total of 10,291 new listings were added (in all the 23 counties reported by NWMLS) during March. The total no. of active listings at the end of March was 9,418. That was a drop of 21.63% from the same month a year ago. Compared to February, March's inventory increased by 2,505 listings, still felling short of matching demand in the entire region.

According to the figures of Northwest MLS, in December 2020, new listings, pending sales, closed sales, and prices all went up in the Puget Sound region when compared to the same time last year, according to the report from Northwest Multiple Listing Service. Every market serviced by NWMLS was trending below December 2019 for total active inventory.

Year over year, the median sales price in the four-county metro rose between 9.6% to $740,000 in King and 17.1% to $439,000 in Pierce. Prices in Snohomish and Kitsap counties both increased by about 12% to $573,495 and $426,000, respectively. Of the NWMLS's 22 counties where prices increased, only King did not see double-digit hikes. The largest increases were logged in outlying counties like Kittitas — up 30.4% to $452,500 — and Pacific, where prices jumped nearly 38% to $282,500.

Across the 25 counties in the MLS at the end of December, there were 4,732 active single-family and condominium listings. That's down 44% from a year ago. There were only about two weeks of supply (0.53 months) overall. Only five counties had more than a month of supply, well below the four-to-six months of supply used by housing analysts as a gauge of a balanced market.

In King County, despite a nearly 62% increase in new listings compared to a year ago, the insatiable buyer demand quickly absorbed available properties. In December, the county had 1,793 new listings, up from 1,107 in December 2019. But still, the number of total active listings continued to be about 14% lower than it was at the same time in 2019. The county saw 3,096 closed sales in December, up 28% over 2019. Home prices were also up nearly 10% year-over-year, at a median price of $676,000 in December.

Seattle Real Estate Investment: Should You Buy Investment Properties?

Should you consider investing in Seattle real estate? Well, to answer that question we should take a look at its economy and jobs. Many real estate investors have asked themselves if buying a property in Seattle is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead. Seattle is a fairly walkable city in King County of Washington. It has a mixture of owner-occupied and renter-occupied housing. According to Neighborhoodscout.com, a real estate data provider, three and four-bedroom large apartment complexes are the most common housing units in Seattle's real estate market.

Other types of housing that are prevalent in the market include single-family detached homes, duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 40% of housing units in Seattle. At the national level, single-family rental homes have grown up to 30% within the last three years. The Seattle real estate market always looks nearly as expensive as an overheated market. We all know that Seattle is an expensive real estate market that gives many investors pause. However, there are many compelling reasons to invest in Seattle.

After a significant decline in the Seattle home prices in the past year, the prices have taken a good jump in the latest quarter of 2020. The shortage of homes for sale in the Seattle housing market is causing prices to rise. And so for all those reasons and more, rising property values are a positive development for homeowners and sellers in the Seattle area. The ongoing nationwide crisis has affected the real estate market of Seattle as well but not as much as we expected. As housing inventory in Seattle remains tight, it would make things very challenging for buyers.

Seattle Housing Demand is Strong

What does the state of Silicon Valley real estate have to do with the Seattle real estate market? Quite a bit. Seattle has long been a second-tier technology hub, bolstered by companies like Boeing, Amazon, F5, and Real Networks. Seattle’s strong tech ecosystem has led to several startups choosing to start here, but more importantly, many tech giants are setting up “outposts” here. They’re moving jobs to Seattle so they can afford to expand or simply afford to remain in business. The influx of new high-paying jobs plus relocating employees to Seattle is driving demand for homes in Seattle. Over the past 10 years, Amazon has grown more than tenfold in the city of Seattle, from about 4,000 employees in its hometown to over 45,000.

During the same time, the median home price in the city has shot up from $420,000 to $720,000 (according to the Northwest MLS) and home prices in the metro area as a whole have gone up 47 percent. Between 2008 and 2018, over 535,000 homes have sold in the entire Seattle metro area. For comparison, that’s 41 percent more than in the similarly-sized San Diego metro area. Much of this growth in the local housing market can likely be attributed to growth at Amazon. The Seattle real estate market shares many of the constraints that drove up real estate prices in San Francisco. You can’t realistically build on water. It is hard to build in the mountains. You can build up, but that takes time and is expensive. And all the while, everyone wants to live close to the city center and jobs. This helps keep property values in the Seattle housing market high.

Seattle Real Estate Investment Generates Excellent ROI In The Long Term

Seattle's housing market has been one of the hottest in the country for years. In the past ten years, the annual real estate appreciation rate has amounted to nearly 6.5%. This puts Seattle in the top 10% nationally for real estate appreciation. Seattle has repeatedly hit lists as being among the top cities for real estate sellers to get the highest return on their investment. Property values have gone up consistently for years. Rental rates are high and continue to rise, guaranteeing ROI for those who buy and hold properties for the long term. We’ve already addressed the fact that you can raise rents as necessary to match the market. This means you will certainly be able to profit from the large rental market in Seattle whether you buy and hold or buy and flip.

Seattle Has Friendly Business Climate

Businesses aren’t just relocated to Seattle to tap into a growing, skilled labor market. Others are simply relocating because they cannot stay in business in California. California has the highest income taxes in the United States. Incredibly intrusive and endlessly proliferating regulation only makes it harder for businesses to operate. While many businesses are moving to Texas, Seattle is closer both in culture and geography. That they can find cheaper talent and real estate while gaining more freedom to operate their businesses only adds to the bottom line.

Seattle's Tech Landscape Is Rapidly Evolving

Seattle was the fastest-growing major city in the country in 2015. It has ranked among the top 5 fastest growing cities since 2010, hitting a 3.1% annual growth in 2016. Many young people move here because it is seen as an excellent place to live and get started, and that’s aside from the strong job market. The exodus from California to Seattle is only part of the equation, since Seattle attracts people from all over the country, and in truth, around the world. Seattle's tech landscape and real estate market are rapidly evolving.

Google has upped the size of its new Seattle campus. Facebook has been on a hiring spree in the Seattle area, particularly for its virtual reality arm Oculus, which is growing fast in Microsoft’s backyard of Redmond. GeekWire reported on new HQ leases for top Seattle startups Rover and Outreach. Other companies continue to grow and that will pick up any slack. Tech has blown up Seattle. For the past 5 years, we have seen 50% price growth in this market which has priced out many middle-class buyers.

Seattle Rental Market Is Very Strong

Around a third of people in the U.S. rent. However, in Seattle, the rate is over half. This is partially due to the cost of homes in the Seattle housing market. Another contributing factor is that Millennials are less willing to be tied down to a home and thus prefer to rent, while Seattle is one of the top cities for attracting these young adults. They’re probably going to continue to rent instead of buying homes. Environmentalist protections for large swaths of land around Seattle limit how far the city could spread out.

This prevents the value of homes in the Seattle housing market from coming down as people relocate to distant suburbs, trading home values for commute time. Building up is increasingly an option, but you can’t do that here the way they’ve done it in Miami. The financial district allows buildings to be as tall as FAA regulations allow, but that’s pretty much it. Nor does that designation matter much, since the area is mostly built-up. The rest of Seattle is zoned low, preventing demand from being met by building condo towers. That keeps Seattle rental property rates high.

Rental prices are declining in Seattle due to the ongoing pandemic which has caused high vacancies. As of December 7, 2021, the average rent for a 1-bedroom apartment in Seattle, WA is currently $1,795. This is an 18% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Seattle decreased by -4% to $1,275. The average rent for a 1-bedroom apartment increased by 3% to $1,795, and the average rent for a 2-bedroom apartment increased by 5% to $2,500.

• Two-bedroom apartments in Seattle rent for $2,500 a month on average (a 25% increase from last year)
• Three-bedroom apartment rents average $3,150 (a 14% increase from last year).
• Four-bedroom apartment rents average $3,725 (a 6% decrease from last year).

Only 15% of the apartments can be rented for less than $1500, and more than 50% of the apartments are priced at more than $2,000 per month. This shows that overall rent prices are very high in Seattle and a huge drop in rent prices can help new renters to lock in a long-term lease.

These are some of the most affordable neighborhoods where the rent prices are below the Seattle average rent:

• Innis Arden
• Richmond Beach
• The Highlands
• Broadway

The Zumper Seattle Metro Area Report analyzed active listings last month across 12 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Washington one-bedroom median rent was $1,425 last month. Bellevue & Redmond were tied for the most expensive city with one-bedrooms both priced at $2,020 while Oak Harbor was the most affordable city with one-bedrooms priced at $1,140.

Here are the best areas to invest in a rental property in the Seattle Metro Area in 2022. Investors should consider the suburbs of major metropolitan areas for residential rental opportunities, as they're an ideal investment and have seen an increase in buyer demand in this pandemic. The cities should be within driving distance of major cities or metro areas. Locations with growing employment opportunities attract more tenants. Most importantly, vet the local neighborhoods thoroughly — its livability, vacancy rate, average rents,  quality of the local schools, and amenities such as parks, restaurants, gyms, movie theaters.

The Cities With Fastest Growing Rents in Seattle Metro (Y/Y%)

• Lynwood had the fastest-growing rent, up 22.8% since this time last year.
• Oak Harbor saw rent climb 15.2%, making it second.
• Redmond was third with rent jumping 14.8%.

The Cities With Fastest Growing Rents in Seattle Metro (M/M%)

• Lakewood had the largest monthly rental growth rate, up 5%.
• Redmond rent increased 3.1% last month, making it the second fastest growing.
• Oak Harbor ranked as third with rent climbing 2.7%.

Seattle's Large Student Market Is Great For Rental Property Investment

While we cannot say this just about the Seattle housing market, the fact remains that large cities with a strong network of educational institutions always create an opportunity for those who want to own rental properties. Students don’t buy houses – they rent. A college town with a single university sees property values rise and fall relative to the popularity of the university. Seattle’s nearly two dozen four-year colleges provide a diverse market for landlords catering to students, while the strong local job market means you can rent the property out to locals if the students move out.

Seattle Is Friendly To Foreign Real Estate Buyers

The United States is pretty friendly to foreign real estate buyers. Canada has limited the ability of foreign buyers to buy up properties in Canada, a major reason why Vancouver became one of the most overvalued real estate markets in the world. This has led many Chinese investors to buy up Seattle real estate instead, making the city the third destination for foreign real estate investors. Some hope to send kids to study in the U.S., while a few have children here. Others buy the properties as a way to park money overseas in a relatively low tax jurisdiction with likely returns if they choose to sell later. Since foreign buyers don’t always rent the properties out, this drives up prices in the Seattle real estate market while indirectly constricting supply.

The Seattle Housing Market Is Landlord Friendly

Many investors are reluctant to buy properties in liberal markets because they’re afraid they won’t be able to protect their investment. However, there are several points in favor of Seattle, especially in comparison to Oregon and California. Washington State outlawed rent control, so you can raise rents to keep up with inflation and demand. If a tenant breaks the lease without the landlord’s consent, the tenant is liable for rent through the end of the lease. Landlords have significant freedom in their screening questions. If a tenant has a month-to-month lease, the landlord can only end it for one of 18 approved reasons, but they can end it with a written notice three weeks before the end of the month.

Where To Buy Seattle Investment Properties?

Are you looking for an investment property in the Seattle real estate market? Seattle has long been second to Silicon Valley, but its strong economy, diverse population, and better regulatory climate are bringing refugees from California and migrants from around the country and world to live here. Regardless of the area’s weather, the Seattle housing market’s outlook can only be described as sunny. Good cash flow from Seattle investment property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Seattle in a growing neighborhood would be key to your success.

The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. You should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Seattle rental property and you should be able to get a good return on your investment over the long term.

The neighborhoods in Seattle must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Seattle might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods. The inventory is low, but opportunities are there.

There are 75 neighborhoods in Seattle. Some of the other popular neighborhoods in Seattle where you can invest in Seattle investment properties are Maple Leaf, Central District, Phinney Ridge, Ballard, Columbia City, Belltown, Beacon Hill, Green Lake, West Seattle, Wallingford, Madison Park, Queen Anne, Magnolia, and Northgate.

Here are some of the best neighborhoods in the Seattle metro area where you can buy a house or an investment property.

North Redmond is in King County and is one of the best places to live in Washington. According to Niche.com, living in North Redmond offers residents a sparse urban feel and most residents own their homes. In North Redmond, there are a lot of restaurants, coffee shops, and parks. Many families live in North Redmond and residents tend to lean liberal. The public schools in North Redmond are highly rated. The typical value of homes in North Redmond is $1,809,188, up 32.6% over the past year.

North Delridge is quite an affordable neighborhood in Seattle. It lies in King County and is one of the best places to live in Washington. According to Niche.com, living in North Delridge offers residents an urban-suburban mixed feel. The area is known for its lush natural beauty and abundant opportunities for outdoor recreation. The public schools in North Delridge are highly rated. The typical home value in North Delridge is $670,846. North Delridge home values have gone up 8.6% over the past year. About 48% of the residents like to rent a home.

Capitol Hill is a densely populated residential district in Seattle (Not be confused by Capitol Hill, Washington D.C.). It is located east of the city's Downtown on the other side of Interstate 5. Capitol Hill is the 9th most walkable neighborhood in Seattle with a Walk Score of 91 and is bikeable. It is one of the city's most popular nightlife and entertainment districts. Made up of a few smaller neighborhoods, rents in Capitol Hill average around $1,900 a month. The community is made up of young professionals, singles, and families with kids. This neighborhood exists alongside 536 submarkets in the greater Seattle market.

According to Redfin.com, the Capitol Hill housing market is somewhat competitive. In October 2021, Capitol Hill home prices were up 18.2% compared to last year, selling for a median price of $780K. On average, homes in Capitol Hill sell after 7 days on the market compared to 20 days last year. There were 37 homes sold in October this year, up from 32 last year.

Highland Park is a neighborhood in King County. Living in Highland Park offers residents an urban-suburban mix feel and most residents rent their homes. The public schools in Highland Park are above average. The median home value in Highland Park is $651,903. Highland Park home values have gone up 13.8% over the past year. According to RentCafe, the average rent in Highland Park, Seattle, WA is $1,711. Highland Park rent is 21% lower than Seattle's average rent. The price range for a studio apartment in Highland Park, Seattle, WA is between $1,850 and $2,299. The price range for a 1-bedroom apartment in Highland Park, Seattle, WA is between $1,850 and $2,299.

South Hollywood Hill is in King County and is one of the best places to live in Washington. According to Niche.com, living in South Hollywood Hill offers residents a sparse urban feel and most residents own their homes. In South Hollywood Hill there are a lot of restaurants, coffee shops, and parks. The public schools in South Hollywood Hill are highly rated.

Sammamish Plateau also lies in King County. It is an upscale, picturesque suburb situated between Lake Sammamish and the Snoqualmie Valley. The market in the Seattle suburb of Sammamish is currently very hot. Living here offers residents a sparse suburban feel. The typical home value in Sammamish is $1,372,491, up 28.3% over the past year.

Sammamish Plateau is consistently ranked among the best places to live in the state and the country. The public schools in Sammamish Plateau are highly rated. According to Apartments.com, the average rent in Sammamish is $1,976. When you rent an apartment in Sammamish, you can expect to pay as little as $1,678 or as much as $2,517, depending on the location and the size of the apartment. The average rent for a studio apartment in Sammamish, WA is $1,678 while the average rent for a two-bedroom apartment in Sammamish, WA is $2,467.

The ten neighborhoods in Seattle have the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.

1. James St / Boren Ave
2. Antioch U-Seattle / 4th Ave
3. Cornish College of the Arts / Stewart St
4. Mars Hill Graduate School / Elliott Ave
5. 12Th Ave S / S King St
6. Boren Ave / Madison St
7. Seattle Community College-Central Campus / Broadway
8. Seattle U / 12Th Ave
9. E Jefferson St / 20th Ave
10. Delridge Way SW / Sylvan Way SW

Apart from the Seattle real estate market, you can also invest in another hot market in Spokane, WA. Spokane is a relatively cheap real estate market on the West Coast. It is already seeing increased demand and property valuations, while it remains a safe place to invest in real estate. Skip Seattle and Silicon Valley and invest in the future growth of Spokane. One reason why Spokane long lagged behind Seattle was its higher unemployment rate.

Seattle has a roughly 3% unemployment rate, significantly lower than the 5% unemployment rate seen in Spokane. Spokane’s economy, though, is seeing a surge of higher-wage jobs. Out of the tens of thousands of new jobs created since 2010, the majority of them pay more than the average county wage – which is in line with the national average. The promise of better pay will lure many people to Spokane to live, fueling demand for the Spokane housing market.

The next one is the Tacoma real estate market. It is the second-largest city in a state that is often a better choice for investors than the largest city since demand is strong but not so great that investors worry about being priced out of the market or being caught up in a bubble. Tacoma is the third-largest city in Washington state. Rents and property values in the Tacoma area are rising due to increased demand and constrained supply. This is an ideal time to buy. Roughly speaking, the median house in the Tacoma area is now the same price as the typical house in King County was in 2012. Furthermore, there are many reasons to consider investing in Tacoma real estate over homes and condominiums in nearby housing markets.

Then comes the Walla housing market which includes two suburbs, encompassing more than fifty thousand people. The area has become the hub of Washington State’s wine country, though wheat remains a major contributor to the local agricultural economy. Walla Walla is one of the real estate markets in the state that doesn’t depend on Seattle’s growth for appreciation. Walla Walla sits on the Washington-Oregon state line. The Walla Walla housing market is poised for steady price growth. The median home value in Walla Walla is $278,247 and home values have gone up 4.4% over the past year.

For a majority of investors, buying or selling real estate is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States.

We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Seattle. Consult with one of the investment counselors who can help build you a custom portfolio of Seattle turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Seattle.

Not just limited to Seattle or Washington but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Seattle turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

Let us know which real estate markets in the United States you consider best for real estate investing! 

Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

REFERENCES

Market Prices, Trends & Forecasts
https://www.nwmls.com/
https://www.zillow.com/seattle-wa/home-values
https://www.redfin.com/news/seattle-homes-sold-above-list-price/
https://www.realtor.com/realestateandhomes-search/Seattle_WA/overview
https://www.rentcafe.com/average-rent-market-trends/us/wa/seattle
https://www.neighborhoodscout.com/wa/seattle/real-estate
https://www.littlebighomes.com/real-estate-seattle.html
https://seattlerealestatenews.com/category/info/seattle-monthly-housing-news
https://www.seattlepi.com/coronavirus/article/best-time-to-buy-or-sell-a-house-during-pandemic-15287608.php

Foreclosure Statistics
https://www.realtytrac.com/statsandtrends/wa/king-county/seattle

Rental Market (Apartments) Statistics
https://www.rentjungle.com/average-rent-in-seattle-rent-trends/
https://www.rentcafe.com/average-rent-market-trends/us/wa/seattle/

Why Invest In Seattle
https://www.collegesimply.com/colleges/washington/seattle/four-year-colleges
https://www.naahq.org/read/industry-insider/6-28-16/america-becoming-renters-nation
http://www.homebuyinginstitute.com/news/will-seattle-start-rising-again
https://www.geekwire.com/2018/amazon-responsible-seattles-housing-cooldown-real-estate-experts-weigh
https://www.cnbc.com/2018/08/02/seattle-housing-market-is-under-pressure-as-chinese-buying-dries-up.html
https://seattlebubble.com/blog/2019/03/27/case-shiller-seattle-home-price-gains-below-average-in-january
https://www.bizjournals.com/losangeles/news/2016/08/12/california-regulatory-policies-businesses-flee.html
https://www.linkedin.com/pulse/seattle-san-francisco-why-west-coast-tech-companies-both-shanahan
https://www.theurbanist.org/2014/09/02/85-foot-and-125-foot-height-limits-are-a-missed-opportunity
https://www.seattletimes.com/seattle-news/politics/seattle-approves-taller-buildings-in-uptown-doubling-heights-in-some-areas
https://www.seattlemag.com/news-and-features/seattle-housing-experiences-high-demands-tech-companies-continue-grow
https://www.thestranger.com/slog/2018/01/09/25692670/seattle-is-now-number-three-us-city-for-foreign-real-estate-investors
https://www.thestranger.com/news/feature/2016/01/27/23480634/what-you-need-to-know-about-your-rights-as-a-renter-in-seattle

Neighborhoods info & rent prices
https://www.apartments.com/
https://www.apartmenthomeliving.com/seattle/
https://www.niche.com/places-to-live/search/best-neighborhoods-to-buy-a-house/m/seattle-metro-area/

This article has been updated to provide a snapshot of the Sacramento housing market in 2021. Sacramento house prices are expected to rise further this year, according to realtors. In 2021, the Sacramento–Roseville–Arden-Arcade, Calif., metro area is expected to have the nation's hottest housing market. According to Realtor.com, the Sacramento metro area will have the strongest housing market in 2021, owing to a rush of buyers fleeing the ultra-expensive Bay Area in search of more reasonably priced homes.

Sacramento home price has been forecasted to grow by 7.4% and home sales are expected to grow by 17.2% year-over-year in 2021. Tight supply and strong demand are boosting home prices in the Sacramento housing market making it strongly skewed to sellers. In October 2o21, the home prices of existing single-family homes in Sacramento County increased by 15.9% to $510,000 while sales declined slightly by -6.8% on a year-over-year basis, according to the most recent report released by the California Association of Realtors. 

Due to the short supply of available properties, Sacramento is going to continue feeling a lot of pressure on the listings in the form of multiple offers from buyers. This has led to Sacramento being a sellers’ real estate market, forcing buyers into fierce competition with one another. According to C.A.R., the unsold inventory in the county is 1.4 months. It shows the amount of time (in months) it would take for the current rate of sales to deplete the total active listings.

Sacramento Housing Market Trends 2021 (Most Recent)

In October 2021, the median list price of homes in Sacramento County was $499,000, trending up 16.1% year-over-year (source: Realtor.com). The median listing price per square foot was $310. The median sale price was $495,000. Sacramento is a seller's real estate market which means that more people are looking to buy than there are homes available. Sellers that are just getting into the market are seeing they can set their asking price a little higher than what they may have expected because inventory is so low and the buyer pool is still growing.

Ideally, a buyer would prefer a sale to list price ratio that’s closer to 90% and a seller would always prefer scenarios that can yield a ratio of 100% or higher. In Sacramento, the Sale-to-List Price Ratio of 101.88% shows that sellers have managed to hold good leverage in these negotiations in the past month.

Below is the latest monthly report of the Sacramento housing market released by the Sacramento Association of REALTORS®. The report shows key housing metrics of Sacramento County and the City of West Sacramento for September 2021.

Housing Sales

• August ended with 1,594 sales, an increase of 0.9 percent over August (1,579).
• In comparison to a year ago (1,695), the current figure represents a decrease of almost 6 percent.
• 200 (12.5 percent) of the 1,594 sales this month involved cash financing.
• 1,088 (68.3 percent) involved conventional financing.
• 202 (12.7 percent) involved FHA financing.
• 65 (4.1 percent) involved VA financing.
• 39 (2.4 percent) involved other types of financing.

Housing Prices & Demand

• The median sales price decreased by 1.9% from $515,000 to $505,000.
• This is a 20.6 percent increase over September 2020 ($438,000).
• The average price per square foot for all homes sold fell from $334 to $331.
• The median DOM (days on market) increased from 7 to 8.
• The average DOM remained at 15.

Housing Supply

• Between August and September, the Active Listing Inventory decreased by 0.7 percent, from 1,527 to 1,516 units.
• Inventory is up 20.6 percent from September 2020 (1,257).
• Months of Inventory remained unchanged at 1.0 month.
• It is the amount of time (in months) it would take to deplete the total active listing inventory at the current rate of sales.

Sacramento Real Estate Market Forecasts 2022

What are the Sacramento real estate market predictions for 2021 & 2022? Is the Sacramento housing market shaping up to continue the trend of the last few years as one of the hottest markets in California? We have already mentioned above that Sacramento is predicted to be the hottest houisng market for 2021. The combined home price and sales growth are expected to be 24.6% in the houisng market of Sacramento–Roseville–Arden-Arcade, Calif.

Let us also look at the price trends recorded by Zillow over the past few years. Since Dec 2011, the typical home value in Sacramento County has appreciated by nearly 181% (Zillow Home Value Index). ZHVI reflects the typical value for homes in the 35th to 65th percentile range. Currently, the typical value of homes in Sacramento is $513,940. Over the past year alone, the Sacramento home values have gone up by 25.5% due to robust housing demand and low mortgage rates.

• Sacramento–Roseville–Arden-Arcade Metro home values have gone up 24.0% over the past year and the latest forecast is that they will rise 14.7% in the next twelve months.
• Sacramento County home values have gone up 23.8% over the past year and will continue to rise in the next twelve months.
• Sacramento City home values have gone up 23.8% over the past year and will continue to rise at a similar pace in the next twelve months.

Here is the graphical representation of historical Sacramento house prices and the latest forecast until Oct 2022. 

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? The demand outpaces the supply in this region. In the last 10 years, Sacramento has experienced some of the highest home appreciation rates of any community in the nation. NeighborhoodScout's data shows that Sacramento real estate appreciated 163.46% over the last ten years, which is an average annual home appreciation rate of 10.17%. This puts Sacramento in the top 10% nationally for real estate appreciation.

In the latest quarter, Sacramento's real estate appreciation rate was 4.2%, which annualizes to a rate of 17.9%. The significant supply-and-demand imbalance is the reason that Sacramento could one of the hottest real estate markets in 2021. In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, the Sacramento housing market can become a buyer’s real estate market if the supply increases to more than five months of inventory.

And that’s not going to happen. This region is very much skewed to sellers due to a persistent imbalance in supply and demand. Due to pent-up demand and diminishing housing inventory home prices in the area will likely continue rising over the coming months. Sacramento’s population has grown steadily over the past few years. A lot of Bay Area residents are now eyeing markets like Sacramento and Fresno. The main reason is that it's more affordable than expensive coastal markets in California. According to the U.S. Census Bureau, Sacramento’s population grew by around 10% from 2010 to 2019. This trend of migration will continue to fuel housing demand within the region.

For buyers in Sacramento County, mortgage rates are at their lowest (lower than 3% for a 30-year fixed-rate mortgage). Therefore, this is a good time for them to enter the market and scoop up their favorite deals. Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment.

Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Sacramento in 2021 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance. 

Impact of Covid19 on The Sacramento Housing Market

Here’s a rundown of where the Sacramento real estate market was before the pandemic and how COVID upended things. The Sacramento housing market has outpaced itself every year but due to the coronavirus pandemic, home sales in Sacramento dropped 40 percent in March, April, and into May, according to local real estate data sources. Data from Sacrealtor.org shows that April closed with 1,013 sales, down 13.4% from the 1,170 sales in March. Compared to one year ago (1,496), the current figure is a 32.3% drop.

The median sales price remained at $400,000 month-to-month. This figure was up 3.9% from April 2019 ($385,000). The Active Listing Inventory increased 10% from March to April, from 1,658 units to 1,823 units. Compared with April 2019 (2,094), inventory was down 14.9%. The Months of Inventory increased from 1.4 to 1.8 Months. May closed with 1,032 sales, up 1.9% from the 1,013 sales in April. Compared to one year ago (1,630), the current figure is a 36.7% drop. The median sales price decreased by 1.3% for the month from $400,000 to $395,000.

This figure is up 2.8% from May 2019 ($384,250). The Active Listing Inventory decreased by 2.6% from April to May, from 1,823 units to 1,775 units. In June, $415,000 was the new historical record for Sacramento's median home price and we reached that with inventory down 17% and new escrows up 31.4% for June 2020. Inventory was also down 37.4% from June 2019. Pending Sales increased by 6.8% from the previous year and increased by 17.3% from the previous month. The total number of closed Escrows decreased by 1.4% from the previous year and increased by 45.9% from the previous month.

Total listings dropped by 13.3% from the previous year and increased by 4.5% from the previous month. July 2020 Statistics released by Sacrealtor.org showed that the month ended with 1,772 sales, up 17.7% from the 1,506 sales in June. Compared to one year ago (1,693), this figure was up 4.7%. The median sales price increased by 1.9% for the month from $415,000 to $422,745. This figure was up 8.4% from July 2019 ($390,000). The Active Listing Inventory decreased 15.3% from June to July, from 1,495 units to 1,266 units. Compared with July 2019 (2,425), inventory is down 47.8%. The Months of Inventory decreased from 1 Month to .7 Months.

2020 Annual Data for Sacramento County and the City of West Sacramento

December 2020 Statistics released by Sacrealtor.org showed that the month ended with 1,528 sales, up 1.1% from the 1,511 sales in November. Compared to one year ago (1,244), this figure was up 22.8%. The median sales price increased 1% from $440,000 to $444,500. This figure was up 15.5% from December 2019 ($385,000). The Active Listing Inventory decreased 23.4% from November to December, from 959 units to 735 units.

Compared with December 2019 (1,315), inventory was down 44.1%. The Months of Inventory dropped from .6 Months to .5 Months. The year 2020 ended with 16,421 Closed Escrows, a 0.8% drop year-over-year. The Dollar Value of Closed Escrows was up 10.1% ($7,586,072,122). The median sales price in 2020 (1/01/20 to 12/31/20) was $461,974, up 11% from the previous year.

Sacramento County Real Estate Foreclosure Trends

Here are some foreclosure statistics of the Sacramento real estate market. The number of new foreclosure filings in the Sacramento real estate market has maintained a steady downward trend since the last recession. However, the Coronavirus has caused a reversal in foreclosure trends. Data by Sacrealtor.org shows that the number of REO sales (single-family homes) in September 2021 was 1 (0.1% of total sales). This is a drop of -90.9% from last year. The number of Short Sales was 0, down 100% from last year.

Sacramento Real Estate Investment: Should You Invest in Sacramento?

Should you consider Sacramento real estate investment? Now that you know where Sacramento is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Sacramento is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.

Let’s talk a bit about Sacramento. Sacramento is the capital of California, though many mistakenly think it is L.A. or another larger city. Sacramento is a minimally walkable city in Sacramento County with a population of approximately just over half a million people. It is overshadowed by bigger, glitzier cities like San Francisco or Los Angeles. When you take suburbs like Yuba City, Truckee, Roseville, and South Lake Tahoe into account, the Sacramento real estate market contains around two million people. However, size isn’t reason enough to invest in any real estate market.

The rise and fall of Detroit and the current decline of other rust belt cities are testaments to this. The city of Sacramento has a mixture of owners and renters, with 47.12% owning and 52.88% renting. According to Neigborhoodscout.com, a real estate data provider, three and four-bedroom single-family detached homes are the most common housing units in Sacramento. Other types of housing that are prevalent in Sacramento include duplexes, rowhouses, and homes converted to apartments. Sacramento has more renter-occupied housing accounts as compared to owner-occupied.

Single-family detached homes account for roughly 60% of Sacramento's housing units. Looking back in 2018 about 2,400 new dwelling units were built in Sacramento, most of them being single-family detached homes. That’s even more than San Francisco, a city of nearly 900,000 people where new towers have altered the skyline. Overall, neither Sacramento nor California produced nearly the same amount of new housing that occurred during the state’s big building boom more than a decade ago, when home construction in Sacramento peaked at 4,000 new units, city officials said.

Although this article alone is not a comprehensive source to make a final investment decision for Sacramento, we have collected evidence-based positive things for those who are keen to invest in the Sacramento real estate market. Let’s take a look at the number of positive things going on in the Sacramento real estate market which can help investors who are keen to buy an investment property in this city.

Sacramento Is A Healthy Housing Market

Sacramento had several thousand people move in there in 2017. Between people relocating here from overheated housing markets and demographic momentum, it saw 1.4 percent growth in 2017 and 2018. This gives the Sacramento housing market a source of slowly increasing demand and rising property values. Yet the area isn’t experiencing a bubble that will burst down the line.

The area also has a steady enough job market that it isn’t experiencing population loss like the San Joaquin Valley due to environmental crackdowns on agriculture or the risk of a collapse like San Francisco’s tech bubble may see. This is why SmartAsset ranked the city as the third healthiest housing market in the state.

For those considering Sacramento real estate investment, median rents of around 1700 dollars a month in Sacramento don’t sound as appealing as the 4000 dollars a month in San Francisco and 3400 dollars a month in San Jose. However, Sacramento is more landlord-friendly than some of the alternatives. For example, the Sacramento housing market isn’t burdened by local rent control laws, though the state government is considering imposing it on the whole state.

A side benefit of the relatively affordable Sacramento real estate market and increasing demand is that any Sacramento real estate investment will see significant appreciation. For example, the average rental rates in the Sacramento housing market went up nearly 9 percent year-over-year in 2018. That was the greatest increase for any American metro area.

Among all the nation's largest metros, the Sacramento metro area is predicted to have the highest sales and price growth in 2021. Therefore, with the affordable entry price of homes, high appreciation, and growing rent prices, real estate investors in Sacramento can enjoy positive cash flow and nice profits in the long term.

Sacramento's Cost of Living & Quality of Life

Sacramento may not offer the $200,000 salaries of tech startups, but it doesn’t cost you more than a million dollars to buy a modest bungalow, either. Sacramento’s cost of living is much cheaper than the California coast just 75 miles away. That’s why the Sacramento real estate market being 50 percent higher than that national average is irrelevant – it is the sizzling home prices in the Bay Area that make people move here for the relative bargains. The 20 percent higher cost of living is a bargain, too, compared to the California coast.

Sacramento offers a better quality of life than the larger cities it is becoming a suburb of. We’ll ignore the fact you’re far closer to Lake Tahoe because any home in the Sacramento housing market puts you in easy reach of the outdoors. The area offers white water rafting, hot air balloons, mountain biking, fishing, and nature walks. You don’t have to buy a luxury property in the Sacramento real estate market to enjoy beautiful views or live near open spaces.

The area had its great cuisine and entertainment options before the influx of Silicon Valley types, but a livelier night scene is forming, too. A side benefit of the more affordable Sacramento housing market is that homelessness is almost nonexistent in Sacramento. You certainly don’t need a poop reporting app to avoid the attendant health hazards while you go on your morning run.

One of the reasons to snap up a Sacramento real estate investment over one in the hotter real estate markets is that the area is safer overall. Sacramento has a slightly higher property crime rate than other big cities in the cities, but Sacramento has a much lower violent crime rate. People are more concerned about being mugged, raped, or murdered than having their car broken into.

The nonviolent crime stats are also skewed due to the more lenient authorities in San Francisco and Los Angeles. When you ignore people shooting up in public and won’t punish violent panhandlers, your official crime rate is lower but that doesn’t make it better. Sacramento seeking to maintain order, public health, and safety make it a safer place to live.

Sacramento is Bucking the Bad Trends Plaguing California

California is seeing overall population growth, but it isn’t healthy. Native-born Americans are fleeing the state for Oregon, Nevada, Arizona, and Idaho. They’re replaced by lower-skilled, lower-paid legal and illegal immigrants. This hollows out the middle class of the state while contributing to sky-high poverty rates. Sacramento is a stark contrast to these unhealthy trends. It is receiving an influx of middle-class and working-class people from around the state who don’t want to leave California.

This is why Sacramento ranked number one in the state for one-way U-Haul trips in 2018. This makes the Sacramento real estate market much healthier since it contains a true income mix. It also allows Sacramento real estate investment investors more options than luxury homes and densely packed affordable units, the only types of housing you see built in San Francisco.

People are willing to commute 90 minutes to San Francisco each way to get those Silicon Valley paychecks, though they don’t want to pay SF prices for a property. This is increasing the value of homes on the western side of the Sacramento real estate market since they’ve become a de facto suburb of the Bay Area.

While Yolo County is a rapidly developing suburb of San Francisco, the eastern side of the Sacramento metro area contains large tracts of agricultural land. The Central Valley is one of the most productive agricultural areas in the United States. This means that Sacramento's real estate investment opportunities include agricultural land and former farmland that is open to new development.

Sacramento's Diverse Job Market Is a Plus for Residents

San Francisco suffered a decline in the early 2000s when the first internet bubble burst. Fears of regulation and anti-trust action against Big Tech firms could cause the San Francisco area to suffer a second major decline because they’re so dependent on high tech to bolster the real estate market. Sacramento does have several high-tech jobs, many of them small firms that relocated to the area for its lower cost of living and doing business.

The government is the largest employer, and it is a stable one at that. Healthcare and construction are major employers, as well. This gives Sacramento a more stable job market in addition to low unemployment rates. Tourism and the service sector is a growing contributor, too, as people move here for the lower cost of living and have more money to spend on luxuries like going out. This contributes to the improving quality of life that will keep the Sacramento real estate market going strong.

The Diverse Sacramento Rental Market Is a Plus for Investors

If you’re considering Sacramento real estate investment, the diverse rental market is a definite plus. Being a state capital, it is home to several universities. This allows you to rent to the relatively large student market in addition to the local population. There is, of course, the University of California campus in Sacramento, but you could own investment properties by American River College and other, smaller schools in the area, too. Around 50% of households are renter-occupied.

Sacramento Rental Statistics: Sacramento was on the nation’s top 10 list of rent increases in 2020. More people are moving out of big cities and heading toward surrounding areas, like Sacramento. The transition is driving rental prices up in counties like Sacramento, while rent in areas like San Francisco is going down. There is not a whole bunch of rental property inventory out there, which is driving the prices up.

As of December 6, 2021, the average rent for a 1-bedroom apartment in Sacramento, CA is currently $1,550. This is an 8% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Sacramento increased by 6% to $1,775. The average rent for a 1-bedroom apartment decreased by -3% to $1,550, and the average rent for a 2-bedroom apartment decreased by -5% to $1,850.

• The average rent for a 2-bedroom apartment in Sacramento, CA is currently $1,850, up 3% compared to the previous year.
• The average rent for a 3-bedroom apartment in Sacramento, CA is currently $2,331, up 17% compared to the previous year.
• The average rent for a 4-bedroom apartment in Sacramento, CA is currently $2,550, up 11% compared to the previous year.

Some of the most affordable neighborhoods for renting in Sacramento are:

• Gardenland, where the average rent goes for $895/month.
• East Del Paso Heights where the average rent goes for $1,195/mo.
• South Hagginwood where the average rent goes for $1,195/mo.

Some of the most expensive neighborhoods for renting in Sacramento are:

• Downtown Sacramento, where the average rent goes for $3,143/month.
• Natomas Crossing where the average rent goes for $2,726/mo.
• Elmhurst where the average rent goes for $2,583/mo.

Sacramento Investment Properties: Where To Invest?

In any property investment, cash flow is gold. California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. Sacramento is an island of sanity in an overpriced, over-regulated, and overheated West Coast housing market.

It reflects the California ideal that most of the state has lost, and that’s we recommend it to investors over the “hotter” California metro areas. These are the same factors causing many Californians themselves to vote with their feet and move here instead of moving out of the state altogether.

The city remains a choice landing spot for coastal emigres tired of skyrocketing housing costs and long commutes. Sacramento is also a fast-growing city with a flourishing real estate market. Continuously developing economy, employment, and a better quality of life offer a lot of opportunities for real estate investors in Sacramento to purchase single-family homes as investment properties.

Good cash flow from Sacramento investment property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Sacramento in a growing neighborhood would be key to your success. If you invest wisely in Sacramento real estate, you could secure your future.

The less expensive the Sacramento investment property is, the lower your ongoing expenses will be. When looking for the best real estate investments in Sacramento, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.

The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Sacramento might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods.

Sacramento home prices are some of the most expensive in all of the United States. There are 89 neighborhoods in Sacramento. Midtown has a median listing price of $838.9K, making it the most expensive neighborhood. Hagginwood is the most affordable neighborhood, with a median listing price of $278K (Realtor.com).

Some of the most popular neighborhoods in Sacramento, California are Florin, East Sacramento, Midtown, Meadowview, Natomas Crossing, Arden-Arcade, North Sacramento, Elmhurst, East Sacramento, Tahoe Park, North Highlands, Natomas Park, Hollywood Park, Rancho Cordova, and South Land Park.

Elmhurst, Land Park, and Upper Land Park are some of the top neighborhoods in Sacramento to buy investment properties. These are quite affordable neighborhoods with a low entry price of homes, high cash-on-cash returns, and a positive appreciation forecast for the coming years.

According to Zillow, Elmhurst home values have gone up 14.3% over the past year. In January 2021, the median list price of homes in Elmhurst was $555K on Realtor.com, trending up 13% year-over-year. The median sale price was $540K. It is a seller's market.

Land Park has become relatively expensive as home values have appreciated by 8.8% over the past year and Zillow predicts they will continue to rise in 2021. The current median value of homes in Land Park is $778,298 (middle price tier of homes). In October 2021, the median list price of homes in Land Park was $699K on Realtor.com, trending flat year-over-year. The median sale price was $670K. It is a seller's market.

Upper Land Park is a neighborhood in the more general Land Park area of Sacramento, California. The real estate is primarily made up of small (studio to two bedrooms) to medium-sized (three or four bedrooms) single-family homes and apartment complexes/high-rise apartments. Most of the residential real estate is occupied by a mixture of owners and renters.

The typical home value in Upper Land Park is $642,646. Upper Land Park home values have gone up 16.6% over the past year and they will continue to rise in 2021. It is a seller's market. The housing supply is very tight compared to the demand for property here. Overall, in terms of house affordability, the City of Trees is a nice choice for real estate investors. According to Zillow's index, the typical property price is $468,036 and home values have gone up 25.6% over the past year.

Here are the ten neighborhoods in Sacramento having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.

1. Oak Park
2. Y St / Broadway
3. 14th Ave / Martin Luther King Jr Blvd
4. Elder Creek Rd / Logan St
5. Fruitridge Rd / 71st St
6. 14th Ave / Stockton Blvd
7. Hagginwood
8. Franklin Blvd / 21st Ave
9. Stockton Blvd / 22nd Ave
10. Norwood Ave / South Ave

We recommend taking the help of the local real estate agents to find neighborhoods with an affordable entry price of homes, high appreciation forecast, and growing rent prices so that as an investor you can enjoy positive cash flow and nice profits. Apart from Sacramento, you can also invest in many other real estate markets in California. California's real estate market is the focus of many U.S. and foreign real estate investors. Apart from the Los Angeles real estate market, you can also invest in multiple cities in California.

The San Diego housing market offers an ideal mix of limited supply, high demand, and excellent income potential. If you’re going to invest in California, it needs to be in San Diego. The San Diego real estate market has been ranked among the ten most expensive real estate markets in the country, though it ranks below several other West Coast cities.

This creates massive demand for San Diego rental properties by those who simply cannot afford to buy homes. The rental market will continue to grow as the city grows an estimated 500,000 by 2050, adding tens of thousands each year. Los Angeles is another expensive real estate market in CA. The numbers may not make sense for many investors but if you ask savvy investors based in LA they would like to bet anytime on this expensive real estate market.

The Los Angeles real estate market has many points in its favor beyond its sheer size. The strong market fundamentals make the Los Angeles housing market a good place to invest if you’re looking at buying real estate in California. Los Angeles has an unemployment rate of around 4%. What makes Los Angeles unique is the employment market. Want to work in Hollywood? Move to L.A. Want to work for a production company or in fashion? Come to L.A. If rent is too high, share an apartment or single-family home with friends.

The Los Angeles real estate market has seen a bump in residential construction. This has helped to satisfy some demand from renters. However, due to increasing demand, the new supply hasn’t brought prices down. The Oakland housing market is a cheaper version of the San Francisco real estate market with similar rental rates and a slightly friendly legal climate. It presents a good opportunity for real estate investors. The Oakland real estate market is second only to San Francisco in terms of rental rates.

It is rivaling New York City, Boston, and San Francisco in terms of rental prices. One-bedroom apartments are averaging $2400 a month. Yet Oakland housing units remain two hundred to five hundred thousand dollars cheaper than San Francisco properties. This means you’ll see far better ROI on Oakland rental properties than San Francisco properties.

Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment properties.

Not just limited to Sacramento or California but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience with our team to see if Sacramento makes sense as a place to invest today.

We can help build you a custom portfolio of turnkey properties located in some of the best markets in the United States. By researching and structuring complete turnkey real estate investments, we can help you succeed by minimizing risk and maximizing profitability.

Please do not make any real estate or financial decisions based solely on the information found within this article. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. This article aimed to educate investors who are keen to invest in Sacramento real estate. Purchasing an investment property requires a lot of study, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and taking the help of a real estate investment counselor.

References

Market Data, Reports & Forecasts
https://www.sacrealtor.org/
https://www.sacrealtor.org/consumers/housing-statistics
https://www.zillow.com/sacramento-ca/home-values
https://www.littlebighomes.com/real-estate-sacramento.html
https://www.neighborhoodscout.com/ca/sacramento/real-estate
https://www.sacbee.com/news/coronavirus/article243805667.html
https://www.realtor.com/realestateandhomes-search/Sacramento_CA/overview

Foreclosures
https://www.realtytrac.com/statsandtrends/ca/sacramento-county/sacramento

Best Neighborhoods
https://www.homeunion.com/sacramento-ca/
https://www.neighborhoodscout.com/ca/sacramento/real-estate

Top Reasons to Invest in Sacramento
https://en.wikipedia.org/wiki/California_locations_by_crime_rate
https://realestate.usnews.com/places/california/sacramento/jobs
https://www.gobankingrates.com/making-money/economy/sacramento-vs-bay-area
https://www.thesandiegocriminallawyer.com/california-cities-most-dangerous.html
https://www.theguardian.com/business/2019/apr/29/big-tech-regulation-facebook-google-amazon
https://www.abc10.com/article/news/local/5-rent-controlled-cities-in-california/103-591256565
https://www.thrillist.com/entertainment/san-francisco/why-sacramento-is-the-new-oakland-sf
https://www.sfgate.com/bayarea/article/SnapCrap-app-San-Francisco-poop-feces-dirty-street-13281837.php
https://www.sfgate.com/expensive-san-francisco/article/uhaul-sacramento-san-francisco-moving-exodus-13509219.php
https://www.sfgate.com/expensive-san-francisco/article/sacramento-move-grass-is-greener-tips-bay-area-13164238.php
https://www.technologyreview.com/s/613628/big-tech-breakup-regulation-antitrust-apple-amazon-google-facebook-doj-ftc-policy

Rental Market Trends
https://www.rentjungle.com/average-rent-in-sacramento-rent-trends/
https://www.rentcafe.com/average-rent-market-trends/us/ca/sacramento/