Sacramento Duplex Market
February was a fairly strong month for duplex sales in Sacramento County, with twenty-five units selling, as opposed to eighteen units last February and an average of 19 units selling each month over the previous years. As will residential properties, duplex prices have fallen sharply over the past year. The average sale price of a duplex in Sacramento County fell 27.3% from February to February: from $348,420 last February to $231,000 this February. During the same period, the median sale price fell by 33.7%, from $348,420 last February to $231,000 this February.
It’s a tough time to be a duplex seller, with the duplex inventory still high at 14.6 months. Though the median sale price of a sold duplex in February was $231,000, the median list price of the 279 duplexes in inventory is $329,000.
What’s encouraging is that we’re seeing more and more properties that pencil out fairly well. One duplex that’s listed now, for example, yields a positive cash flow of $48.00 per month assuming a 20% down, a 10% vacancy factor and a property manager — if you managed it yourself that number would be more like $198.00 per month. Three years ago I’d be hard pressed to find a duplex in Sacramento County that provided any kind of cash flow. Today I found this one after about five minutes of looking — and I’m sure there are others out there.
Admittedly, the cash flow numbers for the “middle of the market” may not be too impressive. Nevertheless, there are bargains to be had, and I believe that as prices on some duplexes and other multi-unit properties continue to fall, sales in this category will pick up throughout 2008 and beyond.
