So, this morning I log into Facebook and see that several people have shared a video that I can only describe as an action movie trailer for the city of Sacramento... check it out below:

WOWZA... I gotta admit, they make the city look pretty dang good! Better than I would've been able to describe, but then again I worked 16 hours yesterday and never get to experience half this stuff!

If you haven't heard the news already, there's currently a mass exodus from the Bay Area to surrounding counties that are more affordable. And a big part of the migration is the younger generation of working professionals who are quickly realizing their money goes twice as far in Sacramento as it does in the Bay Area. We're projected to have 18,000 - 20,000 people moving to Sacramento this year from the Bay Area alone.

"If you are under 40, use hashtags and enjoy networking over craft beer, what do you like best about Sacramento? The cost, the weather and the options for fun."

For even more evidence of this mass migration, just look at all the recent headlines about rents in the Bay Area plateauing or even falling in some areas. That's because tons of people tired of living in a cardboard box for $2,000 a month and are quickly getting the hell out of dodge:

This "mass migration" is a large part of the reason that Sacramento rents are continuing to rise, and we're projected to be the #1 rental growth area in the nation this year, with a 10% year-on-year growth for rents.

This increase in rents is driving millennials to get off their butts and become homeowners, because why deal with regular rent increases when you can buy a home and pay basically the same amount?

http://www.kcra.com/article/millennials-moving-in-to-become-home-buyers/6427779

This huge surge in demand will be met with low inventory, as we simply do no have the housing to satisfy it. New construction easily costs $40-100k per lot BEFORE breaking ground, and most of California would've needed to build 10,000+ housing unit per year FOR THE PAST THREE DECADES to keep our housing prices on par with the rest of the country.

http://www.latimes.com/politics/la-pol-sac-california-high-housing-prices-20160414-story.html

So if you hear people talking about the "bubble bursting soon" or anything like that, they're tripping. Hold onto your butts, because we've probably got 12-36 months of continued appreciation. Short of Donald Trump starting World War III on Twitter, there won't be much to slow it down. This is part of the reason why Sacramento will be the #4 Hottest Metro Market in the Nation this year with an estimated 7.2% appreciation and 4.9% increase in sales growth:

http://www.realtor.com/news/trends/top-real-estate-markets-2017/

All these things are evidence that we're about halfway up the mountain before the next peak, and we're probably somewhere in between an Early & Late Stable Market. We're climbing the ramp to the top again, much in the same way we did in the early 2000's:

So... what does this mean for you? If you can, buy now. Yes, the best time to buy would've been 2009-2010, but you've still got some solid appreciation coming your way and if you're living in the property you can probably hit the 2 year residency mark and be capital gains exempt if you sell at the peak. "The best time to plant a tree was 20 years ago, the second best time is now."

If you're looking for investment property, the mass migration to the area should be welcomed by your lovely 2-4 unit multifamily property. I'd shoot for 6 month leases so you can have more regular rent increases :-) And if you think that hipster millennial won't pay good money to live in your C class neighborhood because it's all that's available, think again:

http://www.sfgate.com/realestate/article/Box-man-living-San-Francisco-400-rent-Berkowitz-7215269.php

http://www.businessinsider.com/crazy-things-people-do-to-survive-san-franciscos-housing-prices-2016-4

Remember this is the same generation that thinks it's cool to pay $60,000 for a cramped 200 sq ft tiny house that they can park on their great uncle's lot and gladly post pictures on instagram about it all day long... until reality hits them:

Tim explains how the reality hit him suddenly as well. “I didn’t really foresee having to choose between owning a fridge or getting rid of all of my shirts.” <-- lolz

But if you've got a property in the Midtown-Downtown or East Sac area, hold onto it and watch the rents surge like crazy so all the young singles can be close to the night life. I know a young couple that pays $1,800 a month to rent a small house near downtown and think I'm crazy for moving out to the burbs and owning a home twice the size for the same cost. They're having a hard time justifying making the move... which is quite silly indeed:

In sum, my opinion is that it's a great time to invest in real estate, and the high housing cost in the Bay Area is driving literally tens of thousands of people to our city of Sacramento, and if you get in front of the demand you'll experience some awesome appreciation and some massive rent increases, and laugh out loud all the way to the bank :-)

Sacramento, California

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