01-07-2025
- Business
- San Francisco Chronicle
Can't afford an average home in S.F.? Try a mansion in Sacramento instead
A mid-priced home in San Francisco and San Mateo County costs nearly as much as a luxury home in the Sacramento area.
It's not just that homes in the San Francisco metro area are far more expensive than they are in the Sacramento region — though they certainly are. The estimated price of a mid-tier home that sold in the San Francisco area from March to May was nearly $1.5 million, according to online real estate brokerage Redfin, almost three times the typical $589,000 price tag in the Sacramento area.
But the price gap between a 'normal' home (one in the middle third of values) and a mansion (in the top 5%) is also greater in the Bay Area than it is in the Sacramento region. A top-tier home in the San Francisco metro area, defined in Redfin's data as the city and San Mateo County, cost about $6.2 million, more than four times the price of a mid-tier home.
In the Sacramento metro area, a sprawling region that stretches to Lake Tahoe, a luxury home costs less than $1.7 million, less than three times the price of a mid-tier home.
The most expensive metro areas don't necessarily have the largest gaps between luxury homes and mid-tier homes. Florida's West Palm Beach and Miami metro areas have relatively moderate prices for mid-tier homes, at just above $500,000. But luxury homes in those metros can cost about eight times as much as a non-luxury home.
The Sacramento metro area, on the other hand, has the second-lowest gap, with the Portland, Ore., area having the absolute lowest ratio.
Cheryl Dibachi, a Roseville-based luxury home broker associate with Compass who moved from the Bay Area in 2005, said she regularly receives inquiries from Bay Area homebuyers who realize they can get much more space for their money further inland. She herself more than doubled her square footage for roughly the same amount of money once she moved to the Sacramento area, she said.
'If you want a luxury property but can't spend the $20 million-plus, there are great opportunities here, and you still have the proximity to the Bay Area,' Dibachi said.
Additionally, the luxury market is relatively new to the Sacramento area, Dibachi said, with higher-end properties mostly being homes rebuilt after 2000, around when the region saw a jump in housing demand. That new demand may have partially stemmed from out-migration of relatively well-off people from the Bay Area, which has a longer history of mansions with eye-popping prices.
The difference in the price gap likely reflects the two regions' levels of income inequality. The average income of the top 20% of earners in San Francisco was 28 times what the bottom 20% made, according to U.S. Census Bureau data from 2023. The same ratio was just 14 in Sacramento and Placer counties.
But the Sacramento region has its own affordability challenges. Researchers have found that the cost of home insurance is far outpacing homeowner income. And Dibachi also said home prices are also starting to rise as more people flock to the area.
'Over the last three years, I've seen a pretty dramatic jump in what people are willing to pay,' she said. 'And it's really, I think, mainly because they can't get the product anywhere else.'
