Overall, for Sacramento, CA is 56.1% cheaper than San Francisco, CA
Your Money Goes Farther in Sacramento
$327,300 Sacramento, CA
75% lessMedian Home Cost
$1,331,100 San Francisco, CA
71% lessProperty Taxes
(annual based on avg price home)
$8,865 San Francisco, CA
Sacramento, CA Webinar
Everything you need to know about Sacramento, CA real estate
FULL TEXT TRANSCRIPTION:
- Okay, good afternoon. Scott Fuller here, founder of leavingthebayarea.com and today we continue our market insider series. Where we travel all across the United States looking at some of the more popular places that people are relocating to and today is no exception. Today we have Tom Daves on our program. Tom welcome.
- How are you doing Scott?
- I'm doing fantastic. Thanks for joining us. I was really excited to get Sacramento in the mix and again we're not traveling too far out, we're staying in California. We're just going, you know, an hour and a half northeast, up to Sacramento but we're seeing a lot of people go up to that area and, you know, whether it's retirement, whether it's for better cost of living, maybe right? Go up there and look for a job that's going to be able to pay maybe a little less but be able to get you a lot more for your dollar. So, real excited to have everybody on the webinar, with us, today. For a complete list of webinars and cities that we're featured in, you can go to marketinsiderseries.com and also wanted to mention we encourage questions on this, the webinar. So, if you're joining us today, if you have any questions you're going to see a little box that will allow you to ask some questions and then we're also going to throw out a couple of polls to ask you and just to kind of engage how we can best answer some of the questions that you have. Okay Tom, I want to turn it over to you right now. So tell us, you've been up in Sacramento for a long time. Clearly you've had a very successful real estate business. I think your information is going to be awesome today. Tell us a little about, kind of your background and what you guys do up there in Sacramento.
- Absolutely, thank you Scott. Yeah so, I've been in the real estate business for over 35 years. Pretty much born and raised in the general Sacramento, Placer County, area and I just love it here. There are so many amazing things to offer for a lifestyle. It's just unbelievable and I've been blessed enough to help a lot of families buy homes, sell homes and create a lifestyle that they really enjoy.
- And the bottom line is it's all about lifestyle, right?
- Absolutely and I think for a lot of people, who are watching this webinar right now, they are thinking maybe I can change my lifestyle. Gear it a little differently than it is and maybe take advantage of that. So I think this is a perfect opportunity. And you know, Tom, I've spent about seven or eight years in Sacramento. This was back probably during, you know, a portion of the 80's and a portion of the 90's. And back then, Sacramento was kind of, it was a government town, right?
- I mean it was the city capital. There wasn't a whole lot going on and it was kind of, okay well we're halfway between San Francisco and Lake Tahoe. So there wasn't really a lot for Sacramento to kind of stand on its feet and say this is a destination area. But in the last 10 to 15 years, that's changed, right?
- Absolutely, definitely changed. When you used to live in the greater Sacramento area, I mean, we were pretty much founded on, you know, the state government. Being, of course, the state capital of California. So we have a lot of federal, state, government, County employment. But now it's really grown and expanded to high-tech Hewlett-Packard, Oracle, Intel, a lot of high-tech companies.
- Because the land is affordable to build and then also, the housing is affordable for the employees and we also have a large group of medical, lot of medical. We have at Venice, we have Sutter, we have Kaiser, so a lot of our population is also on the medical but it's pretty vast, limit based we do have somewhat of a bedroom community, a lot of our populations they'll drive to the Bay Area but I will tell you about 35 to 40% of our homes that are selling are from Bay Area buyers. People in your area that are selling and moving up to our area because they can really, really great values and it's a great opportunity with the real estate here.
- Yeah and I think another thing that Sacramento's really come up on is entertainment as well right? Because now you got Golden 1 Center, which is great and hopefully the Kings will pick up their game a little bit but you got that, you got the rail yard right downtown that's being converted, there gonna have I believe they're breaking ground on a new major league soccer stadium there which is huge.
- And they redeveloped a lot of the downtown area that of course what you're talking about is a lot of these communities, especially northeast of downtown, that had just exploded, I mean they're beautiful, beautiful neighborhoods.
- Absolutely. Don't forget the Giants, the Triple-A Giants are right here in west Sacramento.
- Yeah that's right. Yeah absolutely. So you got a lot of things going on and it's not like okay I'm gonna buy a house up in Sacramento cause it's cheaper, you're gonna have a better quality life but then I'm gonna have to find something to do I'm going to have to drive at a different direction for an hour and a half, that's not really the case anymore.
- Absolutely, absolutely. Yeah so just to touch on some of the values and some of the price points and some of the areas of the communities, many of the viewers I'm sure heard of these areas and locations of course we have a El Dorado Hills which is just close by at Highway 50 corridor, El Dorado Hills for example. I mean you can buy a beautiful home that's about, for example, we have an example here, 3100 square foot home, five bedrooms, three baths, newer build floor, 669,000. It's just unbelievable.
- That's crazy.
- Granite Bay is another popular area, it's over off of Highway 80 corridor and 788,000, three bedroom, three and a half bath, 3,000 square foot, built in pool, it's just a phenomenal area and location. Also there's Lincoln where you can buy a beautiful home, 3,000 square feet, for 499,000. Roseville of course, beautiful home. Here's one fore example, three bedroom, two baths, 460,000, it's 2,000 square feet. Rockland off of Highway 50 is another great area 2,000 square feet, 485 as well as Sacramento. Sacramento proper has even more affordable housing. You can buy a beautiful 16,000 square foot home for about 350,000. It's great for people that want to buy and live here or have a second home or even as an investment property.
- Yeah. It sounds like with a lot of those newer communities, I mean you're also going to have a varying price ranges right. So you're going to have some areas where you can probably get in 350-400,000.
- And then all the way up to beautiful exclusive communities that might be closer to a million. But still you take what you're getting up there, you would have to double that price and you're still not even gonna get to the point of what that same home would cost here in the Bay Area.
- Absolutely. And what's so nice is how the developers have completely developed the beautiful golf courses and the community centers and all of the recreational facilities. We have over six golf courses close by. I'm a golfer so I like to get out to the links so there's great places and then as well as the active adults over 55. We have Del Webb Roseville, Del Webb in Lincoln, Rockland so there's a lot of great over 55 communities that of course have all the amenities. The tennis, golf, bocce ball, walking. Schools are really amazing, we have great school where public or private are charter schools. Schools are amazing in the area. Plus there's some local colleges. We have of course Sacramento State, American River, we have William Jessup Universities so, it's pretty exciting, pretty awesome.
- Yeah. So going back let's touch on and I want to go back and touch on a little bit of some of the active adult communities because I know a large portion of the folks that are maybe leaving the Bay Area or considering leaving the Bay Area maybe are at retirement age or had retired recently or maybe considering retiring soon and so for them it's thinking okay I got a certain amount of Eeuity that's built up in my property, I'm on a fixed income, obviously Sacramento market can be very conducive to that. What percentage of people that you guys are working with or that you see coming into the area are retirees versus let's say working families relocating to the area?
- I would say probably about 50% of the Bay Area buyers are retirees retiring. Just sold a home last week in Cameron Park, beautiful five acre parcel, and beautiful 3,000 square foot home, 800,000 they are retiring, they want their exercise--
- They probably want, they want a pretty big house where retirees are already retirees ahead. I want to scale down--
- Not up but yeah that's great.
- Yeah but the 55 plus communities are very, very active. We have a lot of large communities to facilitate and it really works out great for someone that wants to downsize. Now it's pretty much the age of simplification.
- That's right, you don't want to have a lot of exterior maintenance, you don't want to have a huge house to clean anymore and my understanding of a lot of those Del Webb communities, is that there's a mix of property types right? So you're gonna have your single families which might be smaller or up to the larger one but you're also going to have maybe more of a condo and town hall style properties as well, so really a good mix.
- Yeah absolutely, there is a good mix. What's really nice is most of them are single level because baby boomer generation, anyone born from 1946 to 1964, I'm in that group, I don't--
- No way Tom, you're not in that group, you look too young.
- So single level is nice, don't have to deal with the stairs, just for simplifying everyone's life.
- Yeah, fantastic. What's generally kind of the price ranges as we're talking about some of these active adult communities? What kind of price ranges can you expect? From what range on the bottom end to the upper end?
- Yeah well they start off at 350,000 and they go all the way up to 1.2, 1.4 million. So there's a gamut.
- And you're probably gonna have some HOA dues which may cover a lot of the common areas, lot of the activities is that how it works?
- Right, correct. HOA dues which covers all of the common areas, it covers all of the community grounds, the facilities, the pools, the tennis, everything yeah. It covers the whole nine yards.
- That's awesome. Okay, great. I got a question here from Robert. So what are some of the up and coming areas of Sacramento that he sees changing? So tell us maybe more about what are some of the hotter areas, cause obviously if you look at Sacramento now it's kind of like you said, broken down in certain pockets. What are you seeing some of the hotter communities in the area?
- So one hot community is Elk Grove which is just down the I-5 corridor, it's a southern most city in Sacramento County. A lot of new homes, a lot of new builds and then as you go up Highway 80, there's a lot of new communities out in Roseville and in Lincoln, and in Rockland. So those are the high growth areas.
- And are people typically opting to buy? Cause like you said there's a lot of new construction which in the Bay Area you just don't see that but I think in most of the rest of the country you do. Are people opting for resale homes or are they typically opting for new construction or is it kind of a mix?
- It's really kind of a mix, it's really 50 50. A lot of people really like the new homes and the new communities but there's quite a few, they like the existing homes, the standing inventory because in lot of a new home communities, we do have there's Mello-Roos tax, so there's additional taxes that need to be paid so, a lot of people aren't really interested in that.
- Yeah. Well and again you kinda look at that and like I would say a lot of that goes towards the schools right? So builders come in and they find a community they have to have a certain amount of schools, parks, everything else and I would say Mello-Roos kind of goes towards those cost right?
- Right, absolutely.
- One other question that we have, so talk to us about investors, I'm interested in purchasing investment property up in the Sacramento area. What are some of the specific areas that you might recommend that you could get maybe a little bit better cashflow or have it easier to be able to keep rented and keep some of your vacancy and maintenance cost lower?
- Sure, great question. Sacramento County proper does tend to have better values and higher rents than other outlying areas. You're able to buy a great home for 350,000 and you're able to rent that property out for $2,000 a month. So with the $20,000 down payment, you're going to be able to have good property that's going to at least break even cashflow or maybe a little cashflow. So Sacramento County within the city of Sacramento, there's Rancho Cordova as well as Elk Grove as well.
- Okay fantastic, I'm sure you guys see some of those opportunities for people who are looking for buying hold realm strategy right. So there's probably pretty conducive to that, especially maybe near the downtown area.
- Right absolutely. And we've seen a very stable appreciation, our values of appreciated over the last three years at the rate of, approximately 12%. So of course that's nice, for an investor to realize the appreciation as well.
- Okay, yeah. Well I mean again we never want to make promises of appreciation, we hope that it continues on a good scale.
- Another question from Julie, how about property tax? Are there carryover tax basis between County? I think what she's talking about is if you sell a house let's say in San Francisco County or Alameda County can you keep your same taxes basis if you move on to Sacramento County, El Dorado Hills. You know any of that off the top off you head 'cause we're getting a little bit more specific into the tax.
- I know they just approved some a bill that authorizes certain counties moving to our area but it's case by case.
- So I'll get back to you on that.
- Yeah well and it really it is. We got nine counties in the Bay Area and there's a couple of counties that participate in that but some counties only are within county right, and some will participate with other counties and different areas in California. I think we're seeing more counties adapt or adopt this but it's going to be a while before you can say okay from each county, you go to another county, you're going to be able to keep that same tax base but it looks like it's, I think they're working to get that there. Another question, how's the rental market in the 55 plus communities? I'm assuming what she means by this is that if you're being able to rent a property versus maybe purchase a property. And if I'm wrong I'm assuming that's the question, let me know Julie. But if you were to rent a property, the rental opportunities for creative time and Del Webb communities.
- The rental market is pretty tight to be honest with you. There are waiting list and it is difficult to find a rental in many case. They are available, they can be located but the vacancy rate significantly low right now actually.
- Okay, when you say a waiting list, there's a waiting list for rental properties but not a waiting list to purchase property.
- Correct, correct. That's correct.
- Because clearly any community whether its an adult active community or whether it's a town hall or a condo community, they're only gonna allocate a small percentage of the units in the community that are going to be allowed to be rental properties. And so when you have that stipulation and that's going to like you said, create a larger demand and create in a lot of cases, a waiting list to be able to do that.
- Okay so it looks like, let me rephrase the question here. Can she buy a house with 55 plus community, rent it out just as easily as a non 55 plus community. So that goes back to I think what we were talking about, if it has reach the threshold that's been determined by the community association right.
- What would you say on that one Tom.
- Yeah so, absolutely. So if someone purchased a property in a 55 plus community they can rent it out, there's no restrictions and based on what I just said, there are people waiting in line so, someone wants to buy a property as an investment property in a 55 plus community then you can definitely rent it out, get some high rents and have a nice return as well.
- Excellent, okay. So that can be a very good opportunity for that. Let's talk a little bit more about kind of the industry and the employment. So as we know historically, downtown Sacramento has been mostly government but a lot of the areas that you guys are focusing on now, a lot of the buyers moving to also and El Dorado Hills, tell us about some of those employers, industries, and growth are.
- Sure. Again, we do have a lot of high tech, Hewlett-Packard, Intel, Oracle. A lot of the high tech is moving to our area. As well as, we have a lot of healthcare, healthcare employment between Sutter, Kaiser, and just a lot of the local businesses. We have a lot of wineries, lot of people are moving from the Bay Area and buying acreage, buying land, buying property, opening up their vineyard and winery. A lot of people that's been in a long time goal end plus it's pretty fun. And the climate is perfect in our area and within the foot hills for grapes and for vineyards and for wineries. It's pretty fun.
- It's funny because I think historically I think Napa Valley was for the west coast was pretty much wine country right, which has always been Nomas, some almansa, alanera. Livermore which is in the East Bay, has clearly made a name for itself in wine country and like you said at there as well so it gives it a lot of, a lot to choose from. Makes it fun.
- Oh absolutely.
- Yeah, okay I got a couple more questions here so Susan mentioned that she heard there's a bill on the 2020 ballot that allows a homeowner in CA to transfer their property tax base to any property in any county in California regardless of price but you have to be over 55. Hoping that, that passes.
- Yeah absolutely.
- That goes through. There may be pushback on the county level but we're hoping that, that goes through. Another question how does the locals feel about the surge of newcomers? Tom you love us all right? Or do you not?
- Absolutely. In the most part, everyone welcomes the new comers Bay Area buyers, a lot of the people that are selling here are moving out of state and so they're really welcoming the Bay Area buyers. To come in and purchase their home. I mean my wife is from the Bay Area, she has a lot of friends so we're constantly having parties and gatherings and there's definitely a great community and a lot of great comradery as well.
- Yeah, absolutely. Well that's good 'cause and I would say more so kind of see what I'm seeing on this side 'cause I do see a lot of those. San Francisco to Sacramento I don't think that there's too many people that have an issue with that, it maybe comes a little bit more when it's out of California.
- That's a whole another story.
- Tell us more about like transportation. Has Sacramento has grown? How are the freeways, mass transit, public transportation, things like that.
- Yeah we have some great freeway systems, Highway 80, Highway 50, I-5, plus we have regional transit, local regional transit as well as Amtrak. It is getting busier and busier but nothing compared to the Bay Area. I was actually in San Francisco this morning, I left at about 6 AM and I was driving from San Francisco to Sacramento and the traffic was great, I'm glad I wasn't going the other direction because of course you know it gets pretty busy. Locally our commute is great. Anyone that, let's say if someone works downtown Sacramento the normal commute time from Rosevill to Sacramento with no traffic is normally about 25 minutes and during a busy morning commute time, you can normally add about another 10 minutes for that commute. We have pretty good system, great highways and byways so it's pretty good.
- How many people are keeping their job in San Francisco actually commuting? Whether it's three, four, five days a week?
- Yeah I would say that it's a small percentage, I would say probably at 10% 15%. There's a lot of telecommuting, lot of people work out of there home, which is great. But there is still a portion of our local region that does commute to the Bay Area yeah.
- Okay. Question from Julie, so how does the cost of utilities compare in the Bay Area because of colder winters and hotter summers? So not sure if you've analyzed utilities but from maybe from people that you talked to. Do you know if there's much difference in utility cost in Sacramento versus the Bay Area?
- Sure, there is a slight difference of course. We have pretty hot summers here it's always over a 100 degrees for usually a couple of weeks. So of course that will require more energy, more power. Winters are pretty much the same, but of course solar is very popular and a lot of people utilize solar that keeps their utility bills down. But I would say overall probably a little bit more than the Bay Area. I know in a lot of locations, you guys don't even have air conditioning in a lot of homes do you really need it?
- Well that's right. I mean until you start getting out into the East Bay along the 680 corridor and out towards central valley, unless you're out there yeah, most of them that's going to have central heating but it's not going to have central AC.
- And normally you don't really need it. Are the new home builders, is it pretty common for them to start include solar in package?
- Almost all of them. Almost all of 'em. And they're extremely energy efficient. And they have the package with solar, so to keep things economical.
- Yeah so we're seeing if it's done right, solar systems installed correctly maybe an average electrical bill of $10 a month, average over a period of 12 months. Now that doesn't include gas but is that kind of, what do you guys see on your end?
- Yeah that's pretty close. That's pretty close.
- Okay another question that we have here. Rob asks what are the disadvantages of buying in the Sacramento area? So if there was maybe a couple of things where it's from an investment standpoint or a lifestyle or living there what would you say is maybe a disadvantage?
- You know that's a good question.
- You probably weren't expecting that question. What a navihasi.
- Yeah, can't really think of any disadvantages to buying in our area, in our market. I'm just kind of drawing a blank on that.
- Let me kind of give my two cents on this because we work with a lot of people who are looking to invest in real estate. And so they start in the Bay Area. Now lets say for example whether it's residential or maybe it's five plus units you're getting more into the commercial side of it. Unless you got a lot of money to spend, it doesn't really make sense to invest in the Bay Area in my opinion. The opportunities to get a good return on investment and capturing all these other things you're looking at are great. Are the investment opportunities for a real estate investors good in Sacramento or are you kind of saying you know what we may not have the best market for that either, you might want to look out of state.
- Well we have good investment opportunities here I wouldn't say that there great as far as month over month cashflow. We do have good appreciation. But as far as month over month cashflow I think out of state would definitely be, I heard some great investment opportunity in other markets out of the area.
- Yeah and we're typically telling people in the Bay Area like I said, unless you got a ton of money ready to go and you got to do something with it quickly, it probably doesn't make sense to invest anywhere around here. That's my opinion.
- Yeah absolutely.
- You may not like that but yeah. Irene has a question just regarding being able to look at Del Webb homes online, Irene what I'll probably do is, since there's a lot of different resources there, I would probably ask and get you connected with Tom. He can give you a little bit more information on that. I think, what we found historically is if somebody is interested in a particular active adult community they might go look at that and of course the people who are selling in that market really wants you to buy that market. You wanna make sure you keep it open and look at all of your options right. A lot of the different types of communities that are available and have somebody who can give you certain information.
- Actions on that.
- Yeah absolutely. Yeah it's always a good idea to have a plethora of different communities to consider so the first thing we do of course once we connect with someone is just ask a lot of questions and what we call a needs analysis, what you're really looking for, what they're looking for. So we can really serve them and then we can make our best advice based on what they're needs are long term goals really help 'em out.
- And that leads into a question we just got from Robert is there a website that Tom would recommend to get an idea of listings. That's typically a customized web search that Tom would create for you based off of what you're looking for. If we say well here's the website you can go, you can look at everything that's available, every price range, every property type, that probably wouldn't help you a lot. So as far as just kind of identifying what is it that you're looking to accomplish, what's your time frame, price range and everything else and then be able to get really specific right with that type of list.
- You can just go to tomdaves.com and everything is available, everything that is currently on the market for sale whether it's our listing, another agent's listing, another broker's listing plus we do have some off market properties available that are coming up, where it's not actually on the market which is kind of nice as well.
- Yeah let's talk a little bit about recreation and now clearly getting so close to Tahoe.
- And skiing is going through what the 4th of July this year?
- Oh yeah, yeah absolutely. Squaw Valley is still open, it just snowed up there last weekend but they'll be open until the 4th of July. So Lake Tahoe is only really about an hour away you can just hop on Highway 80 and you can popup to you know either Sugar Bowl, I'm a skier, ski at Sugar Bowl, my kids are on the ski team there. That's part of closer ski areas that's an hour, you can go on up over to, over the summit to of course Squaw Valley, Alpine, Northstar. Or if you're going up Highway 50 there's Sierra, Tahoe, there's Heavenly Valley, there's Kirkwood. So there's just amazing ski areas and of course obviously Lake Tahoe is beautiful in the summertime as well for hiking, water skiing, golfing which is pretty cool. Locally we have a lot of biking, we have the American Road Bike Trail, we also have boating, we have Folsom Lake, Lake Clementine, we have Rollins Lake so there's a lot of lakes that are close by. One day I went snow skiing in the morning and then I came home and went water skiing in the afternoon. That's how close they are.
- That's awesome. You got the Sacramento River, the American River right?
- Boating as well, anything else.
- Okay I think we probably covered most everything I have.
- Is there anything else Tom you wanted to add on and maybe we didn't cover or any questions, final questions we might have?
- No I think we covered pretty much everything if anyone has any questions of course reach out to Scott or myself we'd be more than happy--
- Absolutely. Okay, well Tom thanks again this has been great information for those of you who caught it live that's great, you're able to get some live questions in, we will also have this recorded. So within the next week we will have a recorded version available if you'd like to watch it again or maybe pass it along to your friend who you think might be interested in taking a look at it. And as always you can reach us at email@example.com and Tom thank you again sir, appreciate your time.
- Thank you Scott, all right see ya.
- Okay, all right take care. Thanks everybody. Have a good day.
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