REAL ESTATE NEWS

Sacramento's multifamily sector overall looks steady, with fundamentals expected to strengthen by the end of the year as supply cools down, according to a first-quarter market report from Colliers.

The standout during the period was the weak investment sales, with volume tanking by 64 percent quarter-over-quarter to $208.4 million. Yet, the trailing 12-month volume came in at $1.27 billion, up 54 percent year-over-year.

The quarterly slowdown came as same-store effective rents declined for the third straight quarter and positive net absorption returned in the first quarter (577) compared with the (-391) seen at the end of 2025. Demand outpaced the supply of 209 units.

"The mismatch between supply and demand is evident in the concessions being offered across the market Colliers said.

"With much of new supply being built for the highest price point in the market, landlords have been offering concessions in order to entice renters."

About 20 percent of the available units in Sacramento are offering concessions. That might be keeping occupancy levels stable, even as supply has been elevated in the market in recent years. Occupancy averaged 95.4 percent in the first quarter, which was 20 basis points lower year-over-year but 0.20 percent higher from the fourth quarter of 2025.

The trends look favorable. Colliers forecasts that deliveries will fall by 72 percent in 2026 to just 952 units. Also, the CRE brokerage noted that rent growth could occur if demand stays positive and vacancy falls below 4 percent. Additionally, it went as far as to say that if a rate cut is delivered by the end of the year, that could spur multifamily sales in the city.

Pacific Housing made the top acquisition in the first quarter, with its $50.65 million purchase of 228-unit Savannah at Southport in the Woodland/West Sacramento submarket. Interstate Equities and Karisa Ventures LLC came in second and third with $42.8 million and $16 million buys, respectively.

Source: GlobeSt/ALM