See where apartment rent is rising fastest in the Sacramento region, as demand surges

Apartment rents jumped faster around Sacramento than in almost any other metro nationwide last year, adding to a long-simmering housing crunch, new data show.

Average apartment rent in the four-county area during the last quarter of 2020 was $1,710, up from $1,587 a year prior, according to a market survey of large complexes by real estate firm Newmark. Only one of the 30 biggest cities tracked by Newmark — Phoenix — saw faster growth in rent during the final quarter of 2020.

During the last decade, average apartment rents have risen by $735, or 75%, in the Sacramento region, according to Newmark, including an 8.4% rise during the pandemic.

Rent is rising amid the pandemic for several reasons, real estate watchers say. Demand is nearly outstripping supply. Vacancy rates are extremely low. Sacramento has not built enough new apartment units in the last 15 years to meet demand.

In addition, there has been a notable surge in office workers moving from the higher-priced San Francisco Bay Area to the capital city area, some of them keeping Bay Area jobs and teleworking from their apartments and homes here.

“We have seen major migration from the major markets due to workplaces being more flexible, and people looking for more space and a more affordable area, which Sacramento tends to be compared to the Bay Area,” said Marc Andenmatten, a managing director at Newmark.

Average rent topped $1,800 in eight Sacramento communities tracked by Newmark.

Average rent was highest in Davis at $2,159. Davis was also the only community that saw a decrease - albeit, a slight one - in rent from 2019 to 2020.

Average apartment rent in Elk Grove spiked to $2,029, up from $1,796 at the end of 2019.

Among mid-priced areas, Fair Oaks saw the largest increase in average rent, jumping from $1,461 in late 2019 to $1,655 in late 2020, according to Newmark.

Average apartment rent in Rancho Cordova rose from $1,500 to $1,637, a 9.1% increase.

The cheapest local apartment market tracked by Newmark was Woodland, where average rent rose from $1,152 in late 2019 to $1,186 in late 2020.

Average apartment rent in Citrus Heights rose from $1,347 to $1,521, a 12.9% increase.

Notably, Newmark’s analysis focuses on apartment complexes of 100 or more units, where operators report that almost all of their renters have been able to pay full rents during the COVID-19 period. That has enabled them to raise rents in line with market demand.

A recent surge in construction of newer and more expensive apartment complexes in Sacramento in the past year also has pushed average rents upward.

Rent increases have been less likely, though, in smaller apartment buildings and those run by mom-and-pop owners. Those owners may have more tenants hanging on thanks to ongoing COVID-19-based eviction and rent moratoriums, real experts say.

Newmark surveyed 265 apartment communities with a total of 53,500 units throughout the Sacramento area. The report did not break out rents by size of apartment unit or number of bedrooms.

This story was originally published February 10, 2021 at 5:00 AM.