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The State of the Market: Understanding Where It’s Headed

Recent News

There is a lot of news lately about the rental market and where it’s headed. As usual there’s a number of things that affect the market, but to effectively harness the momentum, we need to look at the common denominators.

Keys in hand

• Investors and investment firms are purchasing thousands of homes at a time when homes enter foreclosure. These homes are then turned into rentals, thus capturing a huge chunk of the rental market and taking homes out of the purchase pool.

• New home builders are creating rental only communities and/or building homes for rent within subdivisions to capture a portion of the rental market. These rentals are often outfitted with top of the line appliances and desirable features not found in older rentals.

• Bay area transplants with higher incomes have created an environment of uncertainty for lower income families. This happens in neighborhoods that have seen large rent increases due to gentrification, house flipping and rapid market changes that increase the asking rent amount.

• The greater Sacramento area has seen a lot of improvement for lifestyle. The new arena, hospitality industry and entertainment has placed Sacramento on the list of hot destination spots. Midtown Sacramento is a fine example of how lifestyle has impacted asking rent amounts.

The market is not the only thing that has evolved. Less homes are being purchased and more homes are being rented as Millennials become a major force in the market. The security of homeownership is  being replaced by the flexibility that renting provides.


In summary, the rental market is on fire and blazing hot. Big investment players, less home buyers, out of area transplants, appealing lifestyle and entertainment choices and the gentrification of lower income neighborhoods will continue to keep the market blazing.


Sacramento Bee: “These new homes have shiny appliances and granite counters, but you can’t buy them.” By Hudson Sangree

Sacramento News & Review: “Rents gone wild: Sacramento is one of the hottest rental markets in the country. Can you still afford it?” By Nick Miller “Amid Bay Area exodus to Sacramento, low-income families at risk of being pushed out, study finds” By Katy Murphy

Posted by: horizon on December 1, 2017
Posted in: Uncategorized