Market Report
Sacramento Multifamily Market Report
2025 Investment Forecast
As Supply Pressure Begins to Abate,
Robust Renter Demand in the Core Becomes Clear
Construction activity projected to ease. With comparatively more affordable mean effective rents than Bay Area markets, Sacramento will also host a faster growing labor market than San Francisco or San Jose this year. Together, this will drive household formation and demand, aiding areas with supply pressure like Central Sacramento, which has seen the most annual deliveries among submarkets since 2022. Despite record-high vacancy entering 2024, the CBD rate declined notably over the past year, with the most net absorption of any submarket. Vacancy should continue declining under a reduced 2025 pipeline, allowing rent growth to return. This dynamic is also in submarkets adjacent to the urban core, like Natomas where vacancy fell below 5 percent last year. The minimal 2025 pipeline here will aid fundamentals as more renters enter the market seeking proximity to Sacramento Airport, the CBD and a strong K-12 school system.
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