California. The Golden State. It’s the center of the West, a bustling hub of industry, culture, and technological progress. And Sacramento is right in the middle of it all.
It’s also an extremely expensive place to live. The average home price in Sacramento is over $500,000, and it’s still rising at frightening rates, according to this news report. There’s no telling when it might fall or become normal again, and the housing shortage is getting scarier every day. What do you do?
Multi-Family Housing
One solution is multi-family housing, like apartments, condominiums, and townhouses. A lot of people don’t like this idea; they want the suburban American dream of a little house, three kids, a dog, and white picket fence. But there are only so many little suburban houses with white picket fences, and they’re running out fast.
Denser housing allows more people to live in a space and limits the sprawl of cities. But not everyone wants to live on the fifteenth floor of a skyscraper and have to walk their dog at a park instead of in their own backyard. There are other options.
Suburban Developments
There’s nothing wrong with deciding to have a little house with a yard in a nice suburb. Just know that you’ll be paying a lot in the Sacramento area. A handful of good California real estate companies are building exciting new developments, and older residents are selling homes as they retire, knowing how much money they can get right now.
A word of caution: Don’t forget the 2008 crash. It was brought about by banks being willing to give homebuyers loans they absolutely couldn’t afford. Many of these loaning systems are starting again due to the low interest rates of the COVID pandemic. When you buy a home, make sure to choose a loan option that you can actually afford. Don’t let low interest rates or deferred payments trick you into taking out money you can’t pay back.
Moving Away
I know this sounds like a crazy overreaction, but a lot of people have been moving out of California recently. The unbelievably rapid rise of costs for everything has been happening everywhere, but it’s hit California the hardest. Have you seen your gas prices recently? Seven dollars a gallon is low!
Homebuyers all around the state are actually moving to Sacramento, since even with its current market insanity, it’s actually one of the cheapest places to live in California right now. I mentioned the news that average price in Sacramento was over $500k? In neighboring Placer County, it’s over $600k.
People move to find cheaper housing all the time. But if you’re looking for something cheaper than Sacramento, you might need to look outside of California altogether. Obviously, this is a big move, and you’ll need to make sure you can find another job outside. Just remember that Tesla recently relocated to Texas, of all places , and you can too. Texas is becoming a hotbed of industry, and although the number of people moving there is increasing housing costs and shortages, it’s still much better than California.
Unfortunately, the housing market as a whole is absolutely booming right now. It’s a great time to sell a house, but a terrible time to buy. And except for nearly-deserted areas like Wyoming and South Dakota, or states with negative population growth like West Virginia, you’re not likely to find a good deal any time soon. Which leads us to the last option for those looking at buying homes in Sacramento, or honestly, just about anywhere.
Just Waiting
Look, I’m not going to lie to you. You’re reading this article because you want to buy a house. But the news on that front… it’s not good.
The housing market right now is exceeding the stock market. It’s exceeding inflation. It’s only second to the car market. With supply chain shortages keeping builders from material and demand at record highs, it’s boiling upwards like a bubble.
But bubbles pop
You might have to wait for a few years if you’re trying to wait out the housing market. Eventually, the shortages will resolve and construction will speed up. Demand will start to fall. People will look around and realize they paid way too much for their houses. It might be slow, or it might be sudden, but prices will fall back in line.
You’ll need patience, and a lot of it, but waiting is almost certainly the way to get the best price for a home, even if it means buying a home a year from now, instead of today.
