Sacramento’s real estate market even more competitive thanks to this outside buying force

As if Sacramento’s real estate market wasn’t brutal enough.

Prospective homebuyers are facing increasing competition from investors purchasing homes in the Sacramento region, a new report from national real estate firm Redfin shows.

In the last three months of 2021, about 19% of homes purchased in the Sacramento region were bought by an investor, defined by Redfin as “as any institution or business that purchases residential real estate.” Of the nation’s 40 largest metro areas, Sacramento ranked 14th in the share of homes purchased by investors, according to the data.

And it appears investors are getting more aggressive here. The percentage of homes in the region purchased by investors increased roughly 46% over the previous year. That was the 15th biggest jump in the nation and the largest year-over-year increase of any California market.

Sacramento real estate analyst and appraiser Ryan Lundquist said the interest the region is seeing from investors “means that there is more competition in the market.”

The median sale price of a home purchased by investors in the region was $550,750, according to Redfin. That’s very close to the region’s median home value, meaning investors are also competing with first-time buyers, Lundquist said.

There are bright sides to the data, he said. More than 80% of the homes sold in the region are being purchased by non-investors. And many of the homes are likely ending up back on the market after being purchased by those so-called iBuyers — companies such as OpenDoor that buy homes and then resell them.

Nationwide, more than 80,000 homes were bought by investors in the fourth quarter of 2021, according to Redfin. The most popular markets for investors were Atlanta, Charlotte and Jacksonville, Florida.

This story was originally published February 16, 2022 at 2:03 PM.