Ryan Lillis
Thu, June 29, 2023, 5:00 AM PDT·2 min read
Despite an overall slowdown in the real estate market, demand for new homes in the Sacramento region remains strong.
Much of that demand is playing out in some of the region’s most sought-after suburbs. More than 550 new homes were sold in the region in May, according to the North State Building Industry Association, led by robust sales in Roseville, Folsom and Elk Grove.
The New Home Co., an Irvine-based homebuilder, is seeking to take advantage of that demand by building more than 800 homes in the region in the coming months.
The company plans to open its 121-home Valley Oak neighborhood in Roseville in July. The neighborhood, near Blue Oaks Park, will have homes up to 4,410 square feet in size, with prices ranging from the high- $600,000s to the mid-$700,000s, New Home Co. said.
Another 44 large, single-family homes are available in El Dorado Hills on lots of up to 19,000 square feet. Prices for those homes, in a development called Ridgeview, will start around $1.5 million. And in Elk Grove, the New Home Co. is planning to open a new community of 122 single-family homes in August, with prices starting in the mid-$600,000s. The company also said it is in the early planning stages for a 525-home subdivision in Elk Grove near Big Horn Boulevard.
Kevin Carson, president of New Home Co. Northern California, said historically low inventory in the traditional home market has led many potential buyers to new home communities. The number of overall home sales and available inventory in the Sacramento region have plummeted this spring, as many homeowners decide to remain in homes financed by mortgages with rates far below what’s being offered now.
“If you’re holding onto a 3% mortgage, you’re less inclined to sell,” Carson said. “There really isn’t the inventory (of existing homes) for people that are moving up or having life changes. They always had the resale market, but that is very limited.” Carson said new home prices have also declined since last year and there is “more sanity in the pricing of new homes.” Nearly half the new homes sold in the Sacramento region in May went for between $450,000 and $600,000, according to the North State Building Industry Association, a range that is considered affordable throughout much of the area.
The promising May sales figure in the region was well above the month’s average total and close to the highest number of sales for a May in the past decade, the BIA reported. Those figures mirror the national trends.
The Census Bureau reported last week that construction began on more than 1.6 million new homes across the nation in May, a 22% increase over April and a 6% increase over May 2022.
Read more by the Sacramento Bee here.
