Real Estate: The Bay Area Influence

Homebuyers from the Bay Area have descended on Sacramento, bidding up real estate to drive housing costs ever higher. Who are they and why are they here?
real estate
Illustration by Kelly Bare

In early spring, Arthur Chinn and Tom Richardson sit in their backyard in the Fairgrounds neighborhood of Sacramento, sipping tea and eating home-baked snickerdoodle cookies. Chinn is an architect and designer, Richardson a retired credit union employee.

Their cream-colored, stucco four-bedroom, three-bathroom home on a newly developed cul-de-sac, purchased for $569,000 just before the onset of the pandemic, is large (2,100 square feet), its ceilings high, its walls tastefully decorated with art. On the L-turn of the staircase, small model houses line a mantelpiece; below them, on one of the carpeted stairs sits a pottery dog.

The area they chose to move into to spend their retirement years—after selling their mid-sized condo in the Bay Area city of Hayward for $780,000—is a low-key neighborhood, tucked south of Tahoe Park and a stone’s throw from UC Davis Medical Center. The Broadway locale of Bacon & Butter is just a few minutes’ walk away. “We decided we were going to leave the Bay Area,” Richardson explains, referencing the high cost of living, the congestion and the endless traffic jams. “But where do we go? We’re not going to leave California and not going south of San Luis Obispo. Sacramento was the only place that had what we were looking for.” The state capital was a city where they already had friends—some architects and artists and designers, an ER nurse and a few others. It would, Richardson felt, be an easy move.

Chinn agrees. He has spent the pandemic months cycling around Sacramento, looking for new eateries—takeout at first, now, post-vaccination, eat-in—and generally familiarizing himself with the lay of the land in their new home. He talks with enthusiasm about “the wonderful restaurants,” the dim sum joints, the hole-in-the-wall delis that he discovered before the pandemic shut everything down, and how he’s looking forward to more culinary revelations as the economy is opening back up again. When he was a child, growing up in Oregon, his family used to bring him to Sacramento to visit an old family friend: Frank Fat. He used to eat in Fat’s iconic restaurant. Now, more than half a century later, Sacramento’s cuisine still draws him in. “To me, it has the Old World flavor,” he says. Chinn also likes the fact that he and Richardson have a garden and can get The Sacramento Bee delivered to their doorstep early each morning. “Everything is simpler here,” he says.

Chinn and Richardson are part of a Bay Area influx into Sacramento and the surrounding suburbs that throughout the past couple years—and especially during the pandemic—has added rocket fuel to the area’s real estate market, and has begun pricing longtime Sacramentans out of the region. Realtor.com estimates that the median asking price of a home in the city of Sacramento is now $395,000, and the median sales price is $400,000—up more than 12% over last year. For Sacramento County, the median sales price is now $445,000. UPDATE The site predicts that the Sacramento region will be the single hottest real estate market in California in 2021. Houses go on the market and within hours the sellers receive multiple offers, many of them waiving contingencies and appraisals, frequently with buyers coming out of the Bay Area real estate market flush with dollars and willing to pay cash for their Sacramento purchases. (Median home price in March for the San Francisco Bay Area was $1.2 million.)

Chinn and Richardson

“There’s a low inventory right now,” says real estate agent Ann Fraire of Reynen & Bardis Homes. “And the few homes there are getting snapped up by Bay Area buyers.” It’s a similar story to that which unfolded in earlier years in coastal towns north and south of San Francisco, a story of real estate mania and local displacement.

Luis Sumpter of Better Homes and Gardens Real Estate says this mirrors a national trend. Nationwide, in January, he says (quoting data generated by Sacramento-based real estate analyst Ryan Lundquist) there were about 346,000 homes on the market; that compares to anywhere from 700,000 to a million in an average January. California alone is about 3 million homes shy of where it needs to be to easily and affordably house its residents. Now, says Sumpter, an exodus from the Bay Area into the Sacramento region—fueled by the shift to remote work and the desire for more space, especially for gardens for children stuck at home—is making the local crunch even worse. “Mostly, they’re buying in the suburbs,” he says, citing Elk Grove as a particularly hot location. “(There’s) also some influx into the Central City—Tahoe Park, North Oak Park. There’s crazy business in Roseville from Bay Area transplants. The foothills as well. Oh, my gosh. It’s really affecting our whole region.”

In Citrus Heights, Cindy Tran of eXp Realty has found in recent months as interest rates have stayed low and paperwork needed to purchase loans has lightened up (pandemic response by the banks), most of her clients are coming from the Bay Area. Some have cashed out on property there, but many others are first-time buyers priced out of the San Francisco-area market who have realized during the pandemic that they can live in other cities and still maintain their Bay Area networks and employment. Some of these buyers are young; others are older, including first generation immigrants, nearing retirement, who can’t afford to purchase a home in the Bay Area and are scared that without some real estate to call their own they risk destitution in old age.

“My family originally came from the Philippines,” says one recent arrival in Sacramento who didn’t wish to publish his name. “My wife came to San Francisco first, in 1998. I followed her with my daughter in 2001. I’ve been in San Francisco since.”

Even though he has a graduate degree in agronomy from UC Davis and now works for a biotech company in Berkeley and his wife is a high school chemistry teacher, they’ve been unable to save enough to buy into the Bay Area’s inflated housing market. Meanwhile, their daughter, who works in the tech industry, and her fiancé bought a WHAT SIZE house in Alameda County that cost $1.4 million, far beyond anything her parents could ever dream of buying.

As retirement neared, the couple—he’s in his late 50s; she’s a couple years younger—realized they would never live in anything larger than a two-bedroom rental apartment if they stayed in San Francisco, and that even that would cost them a minimum of $3,000 a month. They began looking elsewhere: Modesto, Vallejo, Vacaville, San Jose and eventually Sacramento. “We made up our minds. We’re not going back to the Philippines to retire,” he says. “The property we bought is 2 miles from a high-crime area, but we’re ready for the challenge. It’s in North Sacramento. We moved in Feb. 5. The house is nice. We’re enjoying it.” Their SIZE, COST home came with a garden, and the couple are growing vegetables and cherry and lemon trees.

“I think we made the right decision,” he says. “So far, we’re happy. There’s more time to relax. We buy stuff for our garden. Now I have some form of exercise, instead of just watching TV.”

“Mid-year 2020, I started getting a lot of calls. The majority of my clients are aiming for areas that are up and running, being developed,” Tran explains of the influx from points west. People are looking for large houses in Elk Grove, Natomas, Roseville, Lincoln and Rocklin.” It’s not unusual for them to pay up to $50,000 over the asking price. “There is one deal I just closed. The property listed at $439,999. We went into contract at $475,000.”

As far afield as the foothills, real estate agents are seeing this influx. “They’re moving here for the serenity of the area, the excellence of the schools, more space around them and privacy,” says Patricia Seide, who sells homes in exclusive developments in El Dorado Hills—such as Serrano, with its country club and golf course, and where a plethora of local amenities (shopping, farmers markets, summer concert series) are nearby. During the pandemic, Seide says, generations of families that had been dispersed throughout Northern California decided proximity to family trumped ZIP code. “As soon as COVID happened,” she says, “we started getting calls from people to look at homes. If the kids are here, the parents are coming; and if the parents are here, the kids come. The prices in a year just kept going up. Where something was $800 or $900,000, now it’s $1.3 or $1.4 million.”

For 31-year-old Elena MacDonald and 36-year-old Abraham Paul, moving to Sacramento from Sonoma with their infant son, Liam, was a way to break into a housing market that had priced them out in the Bay Area. MacDonald is a teacher and Paul, originally from the Caribbean island of Dominica, is a manager at a Vacaville branch of Lowe’s.

“We were living in Sonoma County, where I grew up, in Rohnert Park,” says MacDonald. “We had been toying with the idea of moving out to Sacramento for the last couple of years, because pricing is more reasonable and we knew our buying power would be greater here. I’d gone to Sacramento State a decade ago; that’s what drew us to Sacramento.”

When the pandemic hit, they approached Sumpter to be their real estate agent and began scouting for homes in town. They looked at upward of 20 properties. Not wanting to come more times than necessary during the pandemic, they bundled their searches, making appointments to see five or more homes each time they drove to Sacramento. Time after time, the homes either went before they could put in a bid or they would offer $10,000 over the asking price only to find a slew of other bidders had offered even more. Eventually, however, they found one within their budget in Arden Manor, on a quiet tree-lined road of bungalows just down the street from Crabtree Park. They put down an offer of $325,000—asking price—on a three-bedroom, one-bathroom 1,300-square-foot house, and to their delight the seller accepted.

It’s modest house with a blue front door and a front yard with grass speckled with dandelions and daffodils beside a driveway big enough to park their Hyundai sedan and their purple Toyota minivan. The back wall of their living room is open brick, the floors hardwood. Paul has to commute daily to Vacaville, but MacDonald, who is an assistant teacher at an online school, can work out of one of the bedrooms. On her lunch breaks, she bundles Liam into his large black stroller and walks to the park. There are slides and climbing structures in the center of the park beside the tennis courts, surrounded by ornamental pear trees.

Elena MacDonald and Abraham Paul

“For me, it’s the peace,” says Paul, explaining why he enjoys his new neighborhood. “I like quiet. Definitely an environment I want my son to grow up in, to make friends. The neighbors are super friendly.”

Real estate agent Tammy Hall of Reynen & Bardis Homes has found that during the pandemic homes in the suburbs and gated communities surrounding Sacramento have been selling extraordinarily fast, the red-hot market stimulated by ever-growing numbers of Bay Area emigres.

Driving a large white Lexus, its interior a lush tan leather, her large sunroof open to catch the sun and wind, Hall barrels out to the Serrano development, a gated community in El Dorado Hills. Even on the more cookie-cutter streets of this development, homes near the golf course are selling for far north of $1 million. In the more exclusive hilltop heights of the community, individually designed mansions, some exceeding 5,000 square feet, sell for many times that.

She drives down one street and ticks off a list of buyers and where they came from. San Jose. San Francisco. Redwood City. Santa Rosa. At least half of the recent buyers are from the Greater Bay Area. “The amount of people wanting to come in from the Bay was crazy,” she said of the early days of the pandemic. “It was up even before that; but the pandemic is accelerating it all even more. These homes just get gobbled up.”

One of Hall’s clients is Paul Sembrano. He and his wife, Hoa, their 8-year-old son, Jeremiah, and 7-year-old daughter, Kailee—decided late last year to move from Hoa’s parents’ house in South San Francisco to Sacramento.

Sembrano is a registered dental assistant and also runs a DJ business. As the pandemic worsened and DJing to live crowds dried up, it made less and less sense to continue paying the thousands of dollars in monthly rent on the storefront in San Bruno where he operated his business. He put his equipment into two 10- by 30-foot storage units and began driving out to Sacramento to visit relatives. They urged the Sembranos to take advantage of the low interest rates and buy a house near theirs in Natomas.

After a few visits to a place Sembrano initially dismissed as being “too far away” from the San Francisco culture—the nightlife, the scene that he loved—the family was sold on the idea. They wanted more space than they could afford in the Bay Area. They wanted a place to park their cars near their house. They wanted a place where their children could play with cousins out in the street or in their backyard. “The quality of life is better,” Sembrano says. “You don’t have to work all hours for a one-bedroom. Parking in the Bay Area is tight. We’d base our life around parking; it sucks. We want to raise our kids correctly. I don’t want to stuff our kids all in one room.”

The Sembranos found a house on the same street as their relatives—a SIZE TK house priced at just over $400,000—and moved in in early April. “Everything we’re getting is brand new,” Sembrano said on a phone call from South San Francisco, where he was clearing out their old rooms. “Brand new bed, brand new furniture. Isn’t that the American Dream? Brand new house, brand new things. It sounds too good to be true. We’re buying a house during the pandemic. Who does that? But the rates are low. I’m locked in at 3.2%, 30-year fixed. It’s been a long-time coming. I’m in my mid-30s. I should have done this long ago.”

Two years after they left the Bay Area, Arthur Chinn and Tom Richardson still sometimes get snide comments from Bay Area friends about their decision to move to Sacramento. “You moved to Sacramento? Why?” Chinn says he is routinely asked. He pauses to consider his response. “Well, why not?” he says. “People in Sacramento are friendly. They say hi when we walk past, and they smile in stores.”

Not only that, but the median home price is still less than $1 million.