Strong Migration Aids Sacramento’s Multifamily Market
Sacramento’s multifamily market registered remarkable gains during the pandemic, with demand boosted by strong in-migration. The average rent rose 0.5% on a trailing three-month basis through January to $1,634, while the national rate stayed flat at $1,392. The metro’s notoriously limited housing supply kept the occupancy rate in stabilized properties high, up 100 points year-over-year through December, to 96.8%.
The unemployment rate dropped to 6.7% in November, but December preliminary data pointed to 7.9%. The increase was correlated to a new spike in infections, that prompted Gov. Gavin Newsom to enforce a new set of restrictions. Employment growth in the 12 months ending in November marked a 7.9% contraction of the workforce, 70 basis points below the national rate. Financial activities—the only sector that gained jobs—expanded by 3.8% during the period. Newsom proposed the Equitable Recovery for California’s Business and Jobs budget plan, a $4.5 billion package that would aid the state’s recovery.
2020 marked the best year in stock expansion, with 2,026 units delivered, and in January, 4,701 units were under construction. Meanwhile, $918 million in multifamily assets traded for a price per unit that rose 27.4% to $229,841.
Read the full Matrix Multifamily Sacramento Report-Winter 2021