Out of all the industries that underwent change, challenges, and growth over the course of the COVID-19 pandemic the past two years, the real estate market has been a true outlier. The historically resilient economic sector has seen some notable shifts in terms of activity and trends, but aggregate yield and potential opportunities have remained consistently high. As the economy begins to stabilize in the post-pandemic era, real estate investors still have the chance to capitalize on the favorable market conditions—particularly in the single family rehab space. Here's a closer look at some of the best performing Northern California real estate markets to help you kick off the search for your next investment project.
Sonoma
With consistent economic growth and proven resiliency to economic turbulence for the past three decades, Sonoma is the ideal location for real estate investors seeking stable returns in one of the most in-demand California markets. Although the median home price is well above the national average, it is relatively affordable compared to the exorbitant costs of the San Francisco and Bay Area markets. There are plenty of available single-family properties on the market that are viable rehab projects. Over the past five years, the average value of a Sonoma single-family home has increased from $342,900 to $755,200—an extremely promising rate of appreciation. With the population growing by 8.4% over the past six years and showing no signs of slowing down anytime soon, it’s safe to say that single family rehab investments will continue to produce solid return on investment well into the future.
Sacramento
If you’re a numbers person, then the Sacramento real estate market data definitely makes it a place to consider for your next single family rehab investment. Property values have appreciated 17.1% in the past year alone, with the average single family home selling for $562,750—which is still an affordable price compared to other areas in California. What’s more, more than 76% of homes were sold in less than two weeks after being listed. That means real estate investors should have no problem in re-selling their rehabbed properties at a premium price point. As the sixth-largest city in the state with a 2.2 million-strong population base that is projected to increase by 54% in the next 30 years, Sacramento is a smart long-term investment that will garner investors sustainable return on investment for years to come.
Solano
Over the past decade, the Solano population has increased by approximately 6.95%--well above both the national and state averages. With average home values currently sitting at around $377,500, real estate investors have the opportunity to acquire single family homes to renovate at reasonable prices—and for those that are looking to rent out their completed projects, the gross median rent in Solano County came in at $1,498, which also beats out the state and national medians.
Nevada County
Ideally located in the scenic Sierra foothills, Nevada County is only an hour’s drive from both Lake Tahoe and the state capital of Sacramento. With easy access from Highway 49, the two main markets of Nevada City and Grass Valley have plenty of tourist attractions, restaurants and shopping that are sure to draw both visitors and aspiring homebuyers to the area. Dubbed “The Silicon Valley of the Sierras,” Nevada County plays host to over 50 major technology companies, making for an influx of well-paid and youthful workers all looking for flexible housing options that suit their lifestyles. Real estate investors focusing on single family rehabs will find a steady stream of qualified tenants and homebuyers, making Nevada County a perfect place to invest.
Get Started Today
Security Financial Services (SFS) has been assisting Northern California real estate investors achieve their goals since 1943. Because we use a dynamic funding structure comprised of our own capital and low-cost lines of credit, SFS can get you the capital you need to grow and scale your business in a fraction of the time it takes conventional lenders and with better interest rates than the competition. Contact us today to learn more about the advantages of partnering with SFS on your next investment project!