The Sacramento real estate market is one of the strongest in the nation, with the winning combination of low supply, high demand, and high occupancy. Prepare now for 2016 with this breakdown of Sacramento rental trends impacting property managers.
Highest Occupancy Rate in 10 Years as Demand Outstrips Supply
The third quarter of 2015 saw a 97.4 percent occupancy rate, the highest recorded in over 10 years. There is significantly more demand than supply in the Sacramento area. Roughly 923 new units were added over the year, while demand existed for 1,032 units. Annual permits for 623 units were granted in 2015, suggesting that Sacramento renters will be looking at a continued shortage of available housing stock through 2016 unless something changes.
This is great news for landlords and property managers, who should have no trouble filling available units — if there even are any to speak of!
Increased job growth is driving the Sacramento real estate market: The California capital saw 24,700 jobs added in 2015. This 2.6 percent job growth rate is higher than the national average.
Sacramento Rental Trends Say the Time Is Right for Property Improvements
The Sacramento real estate market was in negative growth in just March 2013, but started to turn around by October 2013. Since then, growth has been steady — much to the delight of landlords who may finally be able to fill apartments that were long vacant.
This may leave property managers trying to keep up with the rapid growth in landlord-tenant duties after a relatively dry period. With landlords finally receiving tenant income after a long period of higher vacancies, skilled property managers know that the time is right to suggest routine maintenance that will make the apartment retain its value over the long run. If properties you manage could use a new coat of paint or fresh landscaping to retain curb appeal, prioritize these in 2016. Any improvements you are able to make will help rental units retain their value through the 2016 rental market.
Landlords/Owners Stocking Up in Anticipation of a Strong 2016
With home prices in Sacramento still affordable, many owners are considering purchasing another rental property to maximize their earnings. Those hoping to add properties should do so soon, as supply is low. For property managers, 2016 could bring additional properties to manage. If you do not already have systems in place to streamline your property management duties, now is the time to invest in systems that make daily property management easier.
Job growth has been strong ever since 2012, which suggests that the city’s economy will be strong in 2016. Realtor.com nominated Sacramento one of its top markets to watch in 2016, giving a nod to the city’s strong rental market. Based on these factors, landlords and property managers should look forward to another year of continued strong growth. Property managers should continue to be attentive to tenant demands to make long-term tenants happy, while ensuring that they attract desirable tenants to rental vacancies that arise.
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AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money. Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more.