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Market Report

Sacramento Multifamily Market

2Q 2024

Demand Nearly Keeps Pace with Supply; Suburb Ranks
Among Region's Hottest Rental Markets

Local Class A sector a statewide standout. Among major California markets, Sacramento added the second-most units to its rental stock over the past year ending in March, outdone only by Los Angeles. This local influx of apartments, however, was met with encouraging demand, as nearly 2,900 total rentals were absorbed — a more than 14-year high for a four-quarter period. This supply-demand dynamic translated to a moderate rise in overall vacancy, with the metro's 4.9 percent Class A rate ranking as the second lowest among the state's largest markets. Collectively, these conditions suggest that the additional wave of units slated for delivery this year is warranted. Still, these rentals will place some upward near-term pressure on vacancy. Longer term, however, Class A units should remain in demand if the metro's mean upper-tier rent remains $200 to $600 per month below most other in-state markets' Class B averages.

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