Total new-home closings: 2,605
The good: Tagged as a high-performing metro market, this area’s unemployment finally neared the national average in March 2015.
The bad: Current new-home market levels hint at a lack of sustainability, as first-time buyers are squeezed out of the equation.
The bottom line: While ultimately it’s hard to say, 2015 looks to be a turning point at which the new-home market will level off in the region.
While the Sacramento market closed out strong in 2014, several indicators over the year and stretching into early 2015 raise concerns about market leveling. First signs showed amid second-quarter 2014 results, when annual starts registered their first decrease in three years. Meanwhile, the average base price for new single-family homes rose 8% year over year to $438,000, squeezing out first-time buyers. As of May 2015, the region showed concern for the effects historic droughts may have on its area’s new-home market via water restrictions, and news reports surfaced tagging the region for a plateau in its recovery period. Meanwhile, market data provider Clear Capital ranked Sacramento 13th among its “Highest Performing Major Metro Markets” in May 2015, but warned that, “Though May’s top performing markets continue to see improvements, no one market is on pace to match the rates of growth observed over the last 12 months.”