Where to find the best deal in the Sacramento area’s wild real estate market

Cost per square foot – often called the “bang for your buck” factor in home buying – climbed to a record high $300 in April in the red-hot Sacramento spring real estate market. But the increase belies dynamic differences countywide, with house-price averages in some neighborhoods selling for more than twice the price per foot as other neighborhoods.

The reasons are not always immediately obvious, a Sacramento Bee review found.

The real estate dictum of “location, location, location” remains key in determining price. The highest square-footage-cost areas are no surprise, according to April sales data from the Sacramento Association of Realtors.

The ZIP code encompassing Land Park and Curtis Park (95818), two classic central Sacramento neighborhoods, topped the county list at a median price per square foot of $515.

That was more than twice the price of the county neighborhood with the lowest square-footage cost average, $248. However, the lowest cost area was not an older, poorer neighborhood. It was a section of Rancho Cordova (95742 ZIP Code) that includes some of the newest homes in the region in the popular subdivisions of the Sunrise-Douglas area.

Those houses were not cheap, though. The median price in that area was $580,000, considerably higher than the county median price. But those houses were among the largest on offer in the county – often two-story, 2,500-square foot homes on small lots. Only the rural areas of Wilton and Rancho Murieta sold larger homes in April.

Larger homes are ‘cheaper’

Builders of new homes there and elsewhere are taking advantage of simple math: A two-story house can be nearly twice as large without a bigger, more expensive roof, and without doubling the size of mechanical elements of the house.

“It’s an economies of scale thing,” Sacramento real estate appraiser Ryan Lundquist said. “Builders want to build larger homes. They can get costs down.”

Similarly, North Natomas (95835 ZIP Code), where almost all homes are less than 20 years old and new subdivision construction is strong, also had some of the least expensive prices per square feet at $262.

That area was a hot market in April with 60 house sales at a median price of $522,000.

Other inexpensive homes per square foot, however, were in older, less economically thriving areas, including the Florin, Meadowview, Freeport, Parkway and Valley Hi areas in the south Sacramento area, and Del Paso Heights and Robla in North Sacramento.

Notably, the price per square foot of a house can vary widely within a neighborhood, reflecting the unique market value of each house. In Meadowview, sales prices in April ranged from $158 to $360 per square foot.

Most expensive Sacramento neighborhoods

Pricier communities come in very different personalities.

Land Park, Curtis Park, East Sacramento and Arden Arcade were among the priciest areas, based on cost per square foot. All three are historic and stable neighborhoods with great tree canopies and solidly constructed homes with both classic and varied architecture. Land Park, Curtis Park and East Sacramento in particular are located near downtown and score well on walkability.

Arden Arcade is close to the action, but has a distinctly suburban feel, with its more expensive areas tucked away on secluded streets, many without sidewalks.

Two other areas near the top of the square-foot-price list, Walnut Grove and Wilton, offer a very different lifestyle, perched in the south county’s agricultural heartland.

Only four houses sold in April in the Walnut Grove area at the southern end of the county, and they were small houses, only 1,200 square feet on average. But the median cost per square feet was $469.

The Wilton area, noted for sprawling ranchettes on country roads, also ranked in the top ten.

Other areas near the top: midtown Sacramento, and the 95817 ZIP code, which covers the tiny residential enclave of Elmhurst and the bustling area of North Oak Park, where town houses are popping up and gentrification concerns are high.

Hottest neighborhoods

Some otherwise uncelebrated neighborhoods showed the biggest increases in price-per-square-foot in the last year. The modest neighborhoods in and around Mather Field in Rancho Cordova topped the list with a 42% square-foot price increase in April compared to one year before.

The data are based on one month of sales, which can skew the numbers in some areas where there were minimal sales. There were only five sales, for instance, in the 95655 ZIP code at Mather. But the adjacent code area, 95827, near Bradshaw Road, also had among the fastest square-footage price increases.

That likely reflected the attraction of Rancho Cordova among some new and young families who do not want to pay the higher prices in nearby Folsom and Elk Grove.

On average, the price per square foot of homes in the county jumped 15%, according to the Realtor association from April of last year.

Among areas where square-footage prices increased in the 30% range: Rio Linda, Elverta, Wilton, and the northern end of Arden Arcade, north of El Camino Avenue.

Neighborhoods with lower prices in general tend to see higher percentage increases. But the price increases also could be a sign that those neighborhoods or sections of them are being “discovered” by lower-end home buyers, who could upgrade their properties and enhance the attractiveness of those neighborhoods in coming years.

Is it the house or the neighborhood?

For the most part, the reputation of a neighborhood plays a dominant role in per-square-foot house prices. Buyers may factor in crime, traffic, income levels, school ratings, nearby jobs, architectural distinction of houses and local amenities such as parks and trees.

Home construction quality plays a role, to a degree. Properties built in the 1900s to 1930s often have thicker timber and higher quality construction, but not always. Older homes can become more run down and in need of costly modern upgrades.

However, during the pandemic, the value of a home increasingly has included the usability of the outdoor spaces, Lundquist said.

“People seem more sensitive to what’s actually in the backyard,” he said. “The houses with the perfect pandemic backyard, built-in pool, barbecue, covered patios, with a view, place to hang out, anything that feels serene and peaceful.”

This story was originally published May 21, 2021 at 5:00 AM.