2018 Q2 Sacramento Multifamily Report
Date Published: 08/08/2018
Sacramento’s boiling pace of steep rent increases and tightening occupancy has lowered to a more simmering rate. While the market recorded its 15th straight quarter of 96-plus percent occupancy, annual rent increases have been pulling back in recent quarters. Rent growth has now dropped to 3.8 percent year-over-year (still 9th in the nation) and 2.2 percent during Q2. Meanwhile, developers are breaking ground on sizable projects and filing permits for additional units to address demand. At the same time, Sacramento has become a draw for a wider swath of renters from outside the area with the major factors being the revitalization of the Downtown core, thriving cultural scene, regional riverfront amenities, and affordable cost of living. The capital of California is putting itself on the map in a number of ways, no longer overlooked or dismissed by prospective renters and employers. The city of Sacramento just surpassed 500,000 residents for the first time, ranked third in the nation in net Millennial migration, finished 2017 as the fastest-growing city in California, and remained the number one destination for Bay Area residents moving out of San Francisco. Therefore, both institutional and value-add investors continue to circle the Sacramento market. To balance out pent-up demand, an increasing number of units will be added to the market over the next two years as renters from around the state are choosing Sacramento as its home.