Sacramento’s rising rents are among the highest in the country, and housing costs are above the national average. Yet new data shows that the capital region is increasingly popular among San Francisco residents looking for a less costly alternative to the city by the bay.
Some 35 percent of would-be renters and buyers doing online searches in Sacramento are from out of the area, a Zillow analysis shows, and the number one origin site is San Francisco.
The reason is financial. San Francisco monthly home and apartment rents average $3,600, according to Zillow, compared to $2,000 for a mix of homes and apartments in Sacramento. The median house price is $1.3 million in San Francisco, according to Zillow, but was only $385,000 in Sacramento County in August, according to the Sacramento Association of Realtors.
“Search behavior offers a real-time snapshot of where renters are looking and is one way to gauge where markets are headed,” said Joshua Clark, economist at HotPads, a Zillow company online data source. “Renters in more expensive markets may be able to find relief by looking elsewhere, but even in the country’s less expensive markets, affordability can be a challenge for locals.
“Renters fleeing expensive markets can potentially drive up demand in their new hometown, which in turn can impact prices – especially if there’s a noticeable difference in incomes between two nearby areas.”
San Francisco residents also were the leading searchers for housing in San Jose, Seattle and Minneapolis.
The Zillow data found that between 2018 and 2019, Sacramento ranked second in the nation in the percentage increase of outsiders perusing its real estate and rental prices. Pittsburgh saw the biggest increase in out-of-county residents checking in on local real estate.
A similar dynamic is playing out in Southern California, where 43 percent of people searching for houses and apartments in inland Riverside County are from elsewhere, led by Los Angeles County residents.
The numbers do not reflect how many searchers ultimately choose to make the leap to the Central Valley. But in Sacramento, builders and realtors say the number of people moving here from the Bay Area has increased in the last few years.
In some cases, the newly arrived residents are cash-rich retirees who sold an expensive Bay Area home. But in many cases they are less affluent renters who feel they are priced out of the Bay.