DEVELOPMENT hen the coronavirus pandemic became a reality , Sara Muir braced for the worst . The Sacramento real estate agent knew an economic downturn would likely hurt business . In the days after California shut down most nonessential businesses in March , clients went silent . Muir and colleagues prepared for a crash .
But within a week , the calls returned . And before long , Muir was busier than ever . A deluge of new clients from the Bay Area , many of whom could now work from home , wanted more space at a lower price point . Sacramento fit the bill . “ It has been crazy ,” says Muir , an agent with Keller Williams . “ Literally , since the start of ( the ) pandemic , I have been three to four times busier than I normally am .”
Muir ’ s experience isn ’ t unique . Pandemic-prompted changes in the way we work , including the acceptance and , in some cases , promotion of remote employment , is fueling a rush of new residents to the 10-county Capital Region . The influx is doing more than driving sales in an already competitive real estate market . Developers are struggling to keep up with demand for new houses . Some large Bay Area employers are beginning to follow the workers east , putting down a footprint of their own . Questions about the longevity of the trend and the region ’ s ability to keep up with changing workforce and real estate needs loom . But leaders in business and development say the trend could alter the trajectory of the region ’ s economy for years to come .
“ This is a real sea change in the market position of the community ,” says
Barry Broome , president and CEO of the Greater Sacramento Economic Council . “ It ’ s going to create an opportunity we ’ ve never seen before .”
Moving drives housing boom
An influx of new residents , many of whom are believed to be high-income , highly educated young professionals , could have myriad long-term impacts on the region . But some of the earliest , and most obvious , are already apparent .
The region ’ s real estate market has seen skyrocketing home prices and
“ You could see a little more sales tax and not just from more people . If they ’ re spending more time close to home and less time in the Bay Area because they don ’ t have to commute as much , that leads to more discretionary spending ( here ).”
JEFFREY MICHAEL Executive director , Center for Business and Policy Research , University of the Pacific
competition for months . In Sacramento , the average time on the market dropped from 24 days in 2018 to just 10 days in 2020 , a Forbes analysis of Redfin and Zillow data found .
And it ’ s not just Sacramento . The median price of homes in Stockton jumped 21 percent , from $ 390,000 in September 2018 to more than $ 472,000 in September 2020 , according to the Forbes analysis . Officials in Solano County , already a popular home base for workers in San Francisco and Silicon Valley , thanks to its even closer proximity , have also reported a spike in home prices and sales . Robert Burris , president of the Solano Economic Development Corporation , hopes new construction already in the works , including a 7,000-home development near the Fairfield-Vacaville train station , will help .
“ We have in excess of 10,000 homes being built in the next few years , and we feel like the increased demand is going to saturate that supply really quickly and really change the nature of Solano really quickly ,” Burris says . “ A lot of highly skilled , technically trained employees and their families are moving into the area .”
Demand for new home construction is booming across the region . Sales of new homes in the six-county Sacramento region for 2020 were expected to exceed 7,200 , the highest since 2007 , according to Greg Paquin , a housing analyst with The Gregory Group in Sacramento . That ’ s a 20 percent increase from the previous year . Paquin said during a North State Building Industry Association housing forecast in late October 2020 that he expects sales to jump another 10 percent in 2021 , to roughly 8,000 .
Consumer interest in more space and suburban living , combined with historically low interest rates and a regional housing shortage , are driving demand . Michael Strech , president and CEO of the North State BIA , says after the pandemic hit , developers saw an immediate increase in very serious buyers . Beyond some new pandemic-prompted features , such as soundproof home offices , larger porches for distanced socializing and package drop-off space , the wish list remains fairly basic .
“ They didn ’ t want to be in a one- or two-bedroom apartment without any exterior space . They wanted to live , work and play in a home that is new , clean and
56 comstocksmag . com | January 2021