STR in Sacramento

[Noah Laker]

I'm a broker here in Sacramento, own some properties, and through our sister company we manage over 100 STR properties. We have portfolios in NorCal, SoCal, and Arizona.

I made this observation last year that the "vacation markets" such as Scottsdale, AZ took a dive when economic activity slowed down (and COVID money dried up). We saw the same thing across the country in the quintessential vacation markets like Florida and Tennessee. 

However, Sacramento has been remarkably stable. 

Does anyone else have properties in multiple markets? Are you seeing the same thing? My theory is that, because Sacramento is a state capital and a business hub, travelers come here based on necessity. This is in contrast to vacation markets, which rely on travelers spending discretionally. 

I have a few hundred K liquid right now and I'm leaning towards doubling down on Sacramento real estate instead of diversifying to other markets, at least for the time being. Two years ago, my team and I were looking at other markets, but I paused that plan to see where things went, and I'm glad that I did. Pardon me for the long rant, just wanted to throw this out there and see if it resonates or if I'm missing anything.