Realtor.com projects that Sacramento will be the fourth hottest residential real estate market in the country next year.

Javier Vivas, the site’s manager of economic research, said job growth and population growth are the primary factors for the region, where prices are expected to rise by an average of 7.2 percent.
In a familiar pattern, proximity to the expensive Bay Area is also a factor. Even with strong price appreciation in recent years, Sacramento area homes are still half as expensive as comparable homes in San Francisco and San Jose, Vivas said.

Realtor.com’s forecast for 2017 also saw the number of sales in Sacramento growing by 4.9 percent. Even so, Vivas said, a local and national trend of limited inventory is expected to continue.

“We’ve been waiting for supply to come in and quench thirsty buyers, but that’s not going away in 2017,” he said. “There will be plenty of competition and lots of eyes on listings.”

Vivas said Realtor.com is telling its members to keep an eye on interest rates, which are expected to rise, and how they affect buyers' ability to make offers. In Sacramento particularly, larger down payments than the national average are also a factor for Realtors.

“And also understand your local market,” he said. “For Sacramento, understand why they’re moving there.”

Sacramento also ranked fourth in Realtor.com’s 2016 projections for the hottest national markets. For 2017, Phoenix, Los Angeles/Orange County and Boston take the top three spots, followed by Sacramento and Southern California’s Inland Empire. Sacramento is the only metropolitan statistical area to rank in the top five both years, and with Boston the only to also rank in the top 10 both years.

Ben van der Meer covers real estate, development, construction, water issues and the business of sports