When talking to those considering a move to Sacramento, the first question I often get is how much home prices have risen compared to the past. To get straight to the point, this city has seen relatively modest increases over the last five years compared to other areas in California.

According to Zillow, the median home value in Sacramento was about $398,000 at the beginning of 2021, and it has risen to around $465,000 by mid-2026, marking an increase of about 17 percent over five years. Considering that the national average cumulative increase during the same period is around 35-45 percent, Sacramento's growth rate is notably lower.

Looking at the yearly trends, there was a sharp spike from late 2020 to 2021 as remote workers from the Bay Area flocked to the region. After peaking in the first half of 2022, transactions froze sharply with rising interest rates, and from 2023 to the present, there has been a pattern of gradual adjustments and stagnation, with prices even dropping by more than 5 percent in the last year.

Several factors contribute to this trend. Demand that surged during the pandemic in search of lower prices compared to the Bay Area has decreased again with the reduction of remote work, and new housing supply in the Sacramento area has been relatively active compared to other major California cities. Additionally, mortgage rates in the mid to high 6 percent range have continued to suppress buying power.

The first concern that comes to mind is whether this is the bottom or if one should wait a bit longer. Looking at the decline over the past year, it is too early to conclude that the adjustment is completely over, but it is certainly worth noting that a relatively accessible price range has formed compared to other major cities in California.

Future outlooks seem to require a cautious perspective. If interest rates stabilize at lower levels, the suppressed demand may revive, leading to a price rebound. However, given the ongoing increase in supply, it seems more likely that a gradual recovery will occur rather than a sharp rebound.

For Korean households, it is worth noting that Sacramento remains one of the California cities where the burden of purchasing is not significantly heavier compared to renting. However, since there can be significant price fluctuations depending on school districts and neighborhoods, it may be more prudent to observe the recent trends in the areas of interest over the past six months before making a decision, rather than rushing into it.