Sacramento Multifamily Report – Winter 2021
Office workers leaving the Bay Area and limited supply turned California's capital into one of the U.S.'s healthiest multifamily markets.
Sacramento’s multifamily market registered remarkable gains during the pandemic, with demand boosted by strong in-migration. The average rent rose 0.5 percent 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 percent.
The unemployment rate dropped to 6.7 percent in November, but December preliminary data pointed to 7.9 percent. 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 percent contraction of the workforce, 70 basis points below the national rate. Financial activities—the only sector that gained jobs—expanded by 3.8 percent 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 percent to $229,841.