These are some of the issues behind California’s housing crisis
Thousands of millennial homebuyers are expected to enter the Sacramento region real estate market in the next 10 years, but it’s not clear if the area has enough housing to support the influx.
The finding comes from the real estate firm Zillow, which published an analysis showing that nearly 45 million Americans will reach the age 34 – the year when many first-time homebuyers in the US actually make a purchase.
In the Sacramento region, the purchasing age is 33, and some 322,000 people are expected to cross that threshold in the next 10 years – nearly 5 percent more than the prior decade, according to Zillow.
But will Sacramento have enough homes to meet the future demand? Inventory has fluctuated since 2013 and rarely falls below 4,000. Meanwhile, median home prices and rents continue to climb.
In keeping with the previous decade, Zillow concluded the influx of new buyers is expected to push starter-home prices higher as more people compete to land a sale. The trend is also expected to push the age of first-time homebuyers higher.
Some metro areas, like San Francisco and Atlanta, for example, the median age of first-time homebuyers is already at 37.
“Buyers making the transition from renting to homeownership helps ease rental demand, which limits rent-price growth,” Skylar Olsen, Zillow’s director of economic research, said in a prepared statement. “If this coming wave of buyers has to compete fiercely for homes to purchase, that could drive up rent prices as well as home values.”