Happy New Year everyone!! John and I are super excited for the year ahead. We are surely hoping that it won’t be ‘2020 too’ and we hope that you all have the best year ahead of you.
So what will the Bay Area housing market look like in 2022? This is a question on the minds of many real estate investors and home sellers in the Bay Area. While no one can say for sure, there are some trends that suggest what may happen. In this blog post, we will explore some of those trends and make predictions about what the market will look like this. So if you’re thinking of selling your home or investing in property in the Bay Area, read on or watch our video to learn more!
If you’re thinking about selling or buying today, scrap any notion that it’s better to sell or buy in the spring, summer, fall or whatever the case maybe. That old adage that if you’re going to put you’re home on the market, you better wait until after the super bowl, that’s gone. That belief that you can wait for more homes to come up by summer, that’s gone. Listen, none of that holds true anymore. Seasonality is out of the window. Sell when you can and buy as soon as you can.
Now, let’s talk about the pandemic. When the COVID-19 pandemic hit the Bay Area, many expected the real estate market to tank. Sure, it did slow down a bit during the shutdown but as many of you may very well know, demand quickly picked back up after restrictions were lifted, with buyers rethinking their living space requirements which then fueled strong buyer competition leading to low inventory levels and higher home prices. With the variants still on a rampage, some real estate experts say that omicron could worsen the already thin supply of homes for sale, affect mortgage interest rates, and ultimately result in higher homes prices.
Overall, the pandemic notwithstanding, we don’t expect that inventory will climb up significantly. If at all, inventory is expected to grow 0.3% on average in 2022, according to a new report by realtor.com.
Let’s move on to interest rates. Right now, we’re still facing mortgage rates near historic lows—some 30-year rates are still near 3% and some 15-year rates near 2%—but experts do predict a rise. Dr. Lawrence Yun, National Association of Realtors (NAR) chief economist, forecasts the 30-year fixed mortgage rate to increase to 3.5% by the end of 2022 as the Fed raises interest rates to control inflation. For its part, Realtor.com predicts an average mortgage rate of 3.3% throughout the year, hitting 3.6% by end of year. And Bankrate, simply states that: “Interest rate hikes, soaring inflation and a smaller bond-buying program are a recipe for higher mortgage rates in 2022.”
Lastly, let’s talk more about supply and demand. Of course, you can’t have a conversation about Bay Area real estate without talking about these two variables. Over the past few years, we’ve seen sales prices go up across the board. This means that homeowners are gaining more equity on their properties which also means they are more predisposed to hold on to their property instead of selling, and in turn, will contribute to the shortage of available homes on the market.
We expect that home prices are likely to continue it’s upward track in 2022, especially because there won’t be much inventory available to buy while demand stays high. This means that it doesn’t matter if your Bay Area house is located in San Mateo, Palo Alto, Sunnyvale, Campbell or San Jose, you can expect prices to increase across the board.
These are our predictions for Bay Area real estate in 2022. If you’re interested in selling your house, consider speaking with us today! We can give you a FREE Home Price Evaluation to see how much your home is worth now and recommend what improvements to make before selling it.
And as always. live happy and love where you live!