The Capital Region housing market is booming, and multiple players in the homebuilding industry — large and small, public and private — are contributing to an array of products, locations and amenities, beckoning potential buyers to come look, invest and move in.
Location, Location, Location Holds True
Buyers commonly sacrifice other items on their wish list to purchase a house located in areas that hold better value, according to Lori McGuire-Milne, president of Market Perspectives. However, ideal location varies — urban, suburban and rural areas all offer something for someone. “In the Sacramento region, we’re lucky to have good builders building really strong products in the urban, suburban and rural markets,” says McGuire-Milne.
“Location is the biggest priority, but it differs buyer by buyer,” says Abigail Johnson, marketing coordinator of Cresleigh Homes. “We build many suburban single-family and multifamily communities but trending toward urban rather than sprawling out. We focus on building near job centers, services and transit options. People want to be in a place that suits their lifestyle.”
McGuire-Milne agrees. “Urban is very hot right now. The Bridge District in West Sacramento has been doing very well with their for-sale and for-rent communities. Despite a challenging area, The Creamery in (Alkali Flat) is also doing very well, and The Mill at Broadway is successful, having hit a price point that has resonated. ‘Suburban urban’ settings, such as Crocker Village, between Curtis Park and Land Park, and McKinley Village, are also successful.”
Urban neighborhoods are pulling empty nesters from Folsom, Granite Bay, Roseville, Rocklin and other suburban areas who now want to be
in Midtown or Downtown because of the revitalization and lifestyle opportunities. Entertainment hot spots such as the Golden 1 Center and the SAFE Credit Union Performing Arts Center — formerly the Sacramento Community Center Theater, which is being renovated for a fall of 2020 opening — is a “big draw” not just for empty nesters, McGuire-Milne says, but also young professionals and “sometimes even families with older children.”
But for large families or those with younger children, the suburbs are still the place to be. Folsom, Roseville, Rocklin, Lincoln, Elk Grove, West Sacramento and Woodland are consistently popular and draw buyers wanting or needing larger homes; the option of swimming pools; and access to jobs, services, shopping, recreation and good schools. “There is a lot of demand for our communities in Elk Grove,” says Tim Hearl, vice president of sales and marketing for Taylor Morrison. “Everyone appreciates all the amenities the area now has, and we’ve had particular interest from the Bay Area, since Elk Grove’s location is beneficial to anyone needing to commute back and forth.”
And rural areas always appeal to buyers who want large lots, great scenery and freedom from congestion. They’re willing to drive to shopping, services and jobs, though many who take advantage of rural living are retired. Two new communities, Sierra Oaks in Colfax and Zinfandel Ridge in Plymouth, are drawing interest. “These communities may not be flying off the shelves, but there’s definitely a market, even among retirees who may need medical services but are willing to drive a half hour,” says McGuire-Milne.
Homebuilders consider location as seriously as buyers do. “We spend much time and energy researching locations to determine their needs,” says Johnson. “For example, Rancho Cordova was missing large lots, so our Brighton Station fulfills that need for larger homes and more yard space, given the existing inventory. We’re also building three communities up in Yuba County’s Plumas Lake area, which currently lacks surrounding services, yet is more affordable and fulfills a need for first-time buyers.”
Elevations, Amenities and Floor Plans
Large builders of production homes offering hundreds of lots across the Capital Region know what works and what doesn’t, and buyers benefit. Conscientious builders often keep designs as practical as possible within the parameters of the buyers’ wishes.
Production homes can be personalized to varying degrees. “People love choices, such as flooring, lighting, countertops, bathroom fixtures,” says McGuire-Milne. “Production neighborhoods may offer buyers a few outdoor choices too, but usually builders take some control to ensure that elevations aren’t too repetitive.”
New looks in elevations — the exterior facade of homes — are varying the Capital Region landscape, with Cresleigh Homes communities in Rancho Cordova as examples. “We offer elevations, including midcentury-modern and modern architectural styles, that push typical tract home design boundaries,” Johnson says. “You don’t often see such contemporary design in tract homes, especially not before in Rancho Cordova. To appeal to buyers wanting more traditional architectural styles, we offer California farmhouse and urban mission styles too.”
Open floor plans continue to be popular, having left behind formal living rooms and dining rooms. “California rooms,” with floor-to-ceiling sliding-glass doors are popular, and outdoor space is a high priority. Even urban communities are offering balconies, terraces and rooftop decks for which many buyers are willing to pay as much as $30,000 extra.
Icon @ 14&C, a downtown infill community built by Next Generation Capital, exemplifies smaller urban homes maximizing outdoor access. “These three-story homes have second-floor balconies and rooftop decks that represent unique, bragworthy features that are important to homebuyers,” says Christopher Brown of Next New Homes Group, a sales and marketing agency representing small- to medium-sized homebuilders.
Indoors, buyers like “command centers” for messages, grocery lists and laptops. In larger homes, these areas can be their own rooms, sometimes also acting as mudrooms, or in more moderately sized homes, they’re generally alcoves adjacent to the kitchen.
Kitchens and master suites are always important. Buyers love gas ranges, double ovens and islands, and kitchens commonly open to family room spaces. Spacious master suites offer popular separate bathtubs and walk-in showers, and large walk-in closets are the norm.
Flex spaces — areas that can act as a bedroom, den, home office or gym — have become common too. Garages can also offer options. “Location and target demographic are key for three-car garages,” says Johnson. “For our new community in Lincoln, we know three-car garages will be important for storage, boats and other recreational toys. We try to accommodate three-car garages where they fit with home and lot size.”
Trends, Tips and Tradeoffs
Downtown Sacramento’s continued renaissance is luring homebuyers back into the city, and smaller homebuilders are making the most of it. “There’s a big movement toward small infill projects and bringing life to downtown,” says Brown. “While large public builders have tried-and-true designs, smaller private builders, unable to compete directly on price, try to be innovative with locations and architecture and a unique feature or two, whether it’s more desirable appliances, rooftop decks or that perfect location in the heart of the city.”The larger builders also try to differentiate themselves. “Cresleigh aspires to create the best design at the best value, incorporating thoughtful and appealing elevation, layout and standard features,” says Johnson. “We offer quality baseline amenities — buyers can upgrade, of course, but we make sure the baseline is a good value to start.”
Taylor Morrison, another large builder, is offering a community in Elk Grove that stands out. “Milestone, symbolic in name for those starting out or making a life change, is unique with all single-story homes,” says Hearl. “Single story appeals to empty nesters who no longer need upstairs space and are tired of stairs, and the price point targets young buyers too. Energy cost savings of heating and cooling only one level appeals to every- one. Milestone homes are also subtly designed for aging in place, with wider hallways, smooth outdoor transitions and higher electrical outlets on walls.”
Sometimes buyers make tradeoffs, though. Brown admits that seeing empty nesters among those most interested in Icon @ 14&C’s three-story urban homes are a surprise. “We have a large contingent of baby boomers coming from big houses in the suburbs who want to be part of the downtown lifestyle, and counter to what we’ve all thought, they don’t mind the stairs, because this is where they want to be.”
Cresleigh builds multifamily rentals as well as single-family homes. “I see both coming on strong,” Johnson says, “whereas three years ago, I would have said rentals were stronger because millennials don’t want to own, and boomers are selling their houses for a worry-free rental lifestyle. Now, though, millennials are at a median age and trending toward buying homes, just buying them later than previous generations.”
For buyers deliberating between production homes and custom homes, there are advantages to each. Production home buyers benefit from large builder warranties, but they may not have the individual presence with the builder as custom home buyers do. “With a custom home, you’re the one buyer, and the builder is tuned in to you,” says McGuire-Milne. “Custom homes can get buyers onto bigger lots and into more exclusive neighborhoods, but sometimes with more permitting headaches. One of the biggest advantages to production homes is that they’re proven products offering great options.”
A good time to buy is the third or fourth quarter because builders want
to finish the year strong and may offer better incentives, according to Mc- Guire-Milne. “Most builders have a lender’s incentive between $5,000 and $10,000 toward closing (costs) if you use their in-house preferred lender. Depending on builders’ motivations, in the third and fourth quarters they may also offer further upgrade incentives.”
Builders are offering so much these days — various price points, intriguing elevations, floor plan options, appealing upgrades and homes in every desirable setting — that there’s something for every buyer in 2020.