In Sacramento, Buyers Return as Affordability and Population Growth Sustain Demand

Written by:

Steve Marcinuk

Date:

29 Apr 2026

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Among California’s major metros, Sacramento stands out as one of the few still drawing residents in rather than watching them leave. While the state has experienced net population outflows for several years, Sacramento remains one of only two major regions posting net in-migration – a distinction rooted in its relative affordability, lifestyle appeal, and proximity to both the Bay Area and destinations like Lake Tahoe and Napa Valley. That underlying strength is now showing up in transaction data, even as buyer confidence remains uneven.

Christopher Brown, Principal Broker at NEXT Real Estate Group, ERA Powered, has spent 30 years watching Sacramento cycle through booms and corrections. Across his portfolio of companies – which includes a new-home sales and marketing division, a resale brokerage, and a home-building entity – he has a ground-level view of where the market is gaining traction and where it remains stuck.

A Market Healing, But Unevenly

Sacramento’s residential market has spent much of the past two years in a holding pattern. Price appreciation has continued – Brown estimates single-digit gains annually – but sales volume has lagged. That appears to be changing heading into mid-2026.

“Sales volume is starting to pick up,” Brown says, noting improvement over what he describes as 24 months of relatively flat activity.

One of the more unusual dynamics he is tracking is the narrowing price gap between new and resale homes. Historically, buyers expected to pay a 15 to 20 percent premium for new construction. That spread has compressed to roughly three to five percent – a gap Brown describes as unlike anything he has seen in his career.

Despite this, new home sales have not kept pace with resale activity through the first quarter of 2026. Brown attributes the disconnect largely to a high volume of part-time and less-experienced agents who are unfamiliar with how new-home transactions work. He expects this to self-correct as less active agents exit the business. For buyers willing to engage with new construction now, the window may be narrowing – builders are still offering incentives, but Brown believes those will fade as activity picks up later this year.

Sidelined Buyers Begin to Move

Two years of hesitation have built up a large pool of prospective buyers waiting for the right moment – specifically, the combination of lower rates and lower prices that economists broadly agree is unlikely to arrive at the same time. “Those two things don’t go together,” Brown says.

First quarter 2026 saw buyers moving off the sidelines in meaningful numbers. Escalation of the Iran conflict briefly interrupted that momentum, but the underlying flow has continued at a slightly reduced pace.

The cost of waiting has been measurable. Brown’s team uses local appreciation data to reframe buyer conversations: those who sat out the past two years in Sacramento missed roughly $118,000 in equity gains. “You would have saved maybe a couple thousand dollars a year on the interest rate, but you lost out on $50,000 or $60,000 in appreciation each year by waiting,” he says.

The buyers acting now tend to get their information from local professionals rather than national media or informal sources. “The sophisticated buyers aren’t getting their information from a TikTok influencer or Uncle Bob – they’re having real conversations with actual professionals,” Brown says.

Who Is Buying, and What Is Stopping Others

Sacramento’s buyer pool draws from several distinct groups. Bay Area transplants remain a consistent source of demand, drawn by relative affordability and the ability to stay within commuting range. Brown is also seeing early signs of company relocations and growing venture capital activity in the region – a departure from Sacramento’s historical profile that he attributes to the cost advantages of operating outside the Bay Area.

A smaller but notable segment consists of what he calls “bounce backs” – people who relocated to other states during the pandemic and have since returned, finding that Sacramento’s lifestyle outweighed what they found elsewhere.

The more persistent challenge is at the entry level. First-time buyers are entering the market later in life, often carrying student debt and limited savings. Brown sees the average age of first-time buyers rising from the mid-20s to the mid-30s and into the 40s. Down payment and qualification hurdles remain the most common deal-killers.

One emerging workaround is intergenerational wealth transfer. Brown is seeing more parents provide down payment assistance or carry a silent second mortgage, enabling younger buyers to access better loan terms. He describes this as a structural pattern likely to grow over the next decade or two rather than an isolated trend.

Land Constraints and the Small Builder Squeeze

Development conditions in the Sacramento region present a more complicated picture. Land is available in the long run – the area has room to grow outward for decades – but near-term acquisition is difficult, particularly for smaller builders.

Large public homebuilders are absorbing the majority of production lots, and Brown believes some are overpaying to maintain pipeline volume. That leaves independent builders and smaller developers competing for a shrinking share of available parcels.

Compounding the issue is an influx of inexperienced developers who have entered the market without understanding residual land value – the difference between what a finished home sells for and what it costs to build. Several smaller subdivision projects are sitting stalled as owners hold out for prices the market will not support. Brown expects carrying costs to force a reset eventually, but in the near term these situations represent friction in the supply pipeline.

Where Investors Should Be Looking

For capital entering the Sacramento market, Brown sees a few distinct openings. Patient investors with a three-to-ten-year horizon can find value in land plays – acquiring and subdividing parcels in partnership with established builders. His firm is actively working with investors on that model across several projects.

On the product side, he sees a gap in small multifamily – duplexes, triplexes, and fourplexes. Regulatory and insurance headwinds have made this product difficult to build in California, but Brown believes those barriers are beginning to ease. He also points to owner-occupied duplex purchases as an underutilized entry point for first-time investors, noting that FHA programs designed for that type of property remain poorly understood. “I don’t think that’s talked about enough,” he says.

The Regulatory Ceiling

Brown identifies over-regulation as the most durable headwind facing the Sacramento market – more significant, in his view, than interest rate uncertainty or geopolitical disruption. California’s regulatory environment continues to raise the cost and complexity of new housing development.

He sees incremental movement toward more housing-friendly policy but remains cautious about the pace. “We’re seeing some movements to actually promote housing positively and get rid of the regulations – not just talk,” he says. “But getting the politicians out of the way is our short-term challenge.”

Reading the Local Signal

Looking further out, Brown expects 2026 to close as a relatively stable year – modest gains in both price and volume – before activity accelerates in 2027 and 2028. The fundamentals supporting Sacramento’s growth remain intact: population inflow, relative affordability within California, and a lifestyle proposition that continues to attract buyers from higher-cost markets. The near-term work, as Brown sees it, is clearing the friction – whether that means better-prepared agents, more rational land pricing, or buyers willing to act on local data rather than national headlines.

About the Expert: Christopher Brown is the Principal Broker at NEXT Real Estate Group, ERA Powered, bringing 30 years of Sacramento real estate experience across a portfolio of companies spanning new home sales and marketing, resale brokerage, and home building. His multi-faceted view of the market — from land acquisition and development to first-time buyer transactions — gives him one of the region’s more complete perspectives on where Sacramento’s residential market has been and where it is heading.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.