Updated 2026 · Based on median market data for Sacramento, CA
Home values in Sacramento, CA have appreciated at 3% per year. Appreciation is modest, meaning total returns will be driven primarily by cash flow rather than equity gains. This is actually preferred by many investors who want predictable, income-based returns.
If Sacramento continues appreciating at 3% annually, the current median of $445,000 would reach approximately $515,877 in 5 years — an equity gain of $70,877 on a property purchased at the median. With a 20% down payment of $89,000, that represents a 80% return on invested equity from appreciation alone. Combined with 5 years of NOI totaling approximately $67,409, the projected total return is $138,286 — a 155% cumulative return on the initial investment.
Sacramento's population growth of 1% is moderate and positive, supporting steady but not explosive demand for housing. Markets with this growth profile tend to appreciate consistently without the boom-bust cycles of hyper-growth metros. Higher-than-average local incomes ($68,400) support continued price growth as more residents can afford to bid up properties.
Smart investors evaluate both cash flow AND appreciation. In Sacramento, the 3.03% cap rate provides modest ongoing cash flow, while 3% annual appreciation adds an equity component. Conservative underwriting is essential. Focus on deals where the cash flow stands on its own, and treat any appreciation as a bonus.