The Sacramento area, which is experiencing a severe housing crisis, now ranks first in a new list of undesirable: the country’s least affordable new housing market.
The capital region tied with Miami for place, according to a report released Thursday by Knock, a real estate technology company. Knock analyzed household income figures and compared them to the median mortgages on new home construction for the nation’s 50 largest metropolitan areas.
Eighty percent of households in the Sacramento and Miami area are not paying for the purchase of a newly built home, according to the report. In third place was Las Vegas with 65%, followed by Phoenix with 63% and Denver with 62%.
The median price of new homes in the Sacramento area is $ 650,000, which requires an average down payment of $ 39,000, according to the report. In order to pay the down payment, Sacramentians need an income of at least $ 128,447, but the median household income here is only $ 76,706, according to the report.
First-time homebuyers need to save for 21 months to afford a 6% down payment on a new home in Sacramento, behind Miami, which was 30 months away, according to the report.
Kelly Pleasant, owner of Pleasant Real Estate Group in Sacramento, said he would estimate the average price of new homes to be a little lower, between $ 500,000 and $ 550,000.
Over the past 45 days, Pleasant has watched the Sacramento become less competitive, which usually happens in the fall, but there is still a big housing shortage here, he said.
âInstead of maybe 10 offers (per ad), you see five offers,â Pleasant said. “Instead of $ 50,000 or $ 60,000 more, you might get it at list price or $ 20,000 more.”
The Crocker Village development in Curtis Park, where about 200 new homes are under construction, are all purchased except for about 14, said Matt Edwards, director of community sales. The prices are $ 975,000 to $ 1.6 million, he said.
âYou can’t keep up with consumption,â Pleasant said. âThe manufacturers are behind. “
Lack of supply disproportionately affects low-income homebuyers, Knock co-founder and CEO Sean Black said in a press release.
âWhile more new homes are expected to hit the market in 2022, wages have not kept up with growing home prices, keeping new construction out of reach for many, especially first-time buyers who don’t benefit from the equity in a home sale, âBlack said in the release.
The new report comes as Sacramento’s housing crisis is exacerbated by higher-income Bay Area workers who move to the Capital Region during the pandemic, in search of cheaper housing prices and more. more space to work remotely.
During the pandemic, Pleasant, like most real estate agents in Sacramento, saw an increase in the number of clients in the Bay Area and Southern California looking to relocate to Sacramento.
âThey get more for their money,â Pleasant said. âYou can really get a nice house on a nice lot. But you still have a lot of people from Sacramento (looking to buy homes here).
A whopping 45,580 new housing units, including 16,769 for low-income residents, are needed in the city by 2029, according to a state-commissioned report. Home values ââin the region have jumped 21% in the past year, one of the largest increases in the country.
The crisis also extends to the rental market. The typical rent for an apartment in the Sacramento area is now $ 1,760 per month, more than in Seattle, Washington, DC and New York.