• California Statewide Housing Market Forecast for 2022 •
From San Diego to San Francisco, 2021 was a record-breaking year for real estate in California. Sales of houses in California continued to stay strong throughout the year, even with lowered inventory and rising interest rates.
The COVID-19 pandemic ignited a home-buying frenzy, as the epic housing shortage combined with historically low mortgage rates, changing workplace dynamics, and more opportunities to buy a house in California.
But now that we’re out of 2021 and going into 2022, what does this mean for real estate in California? Let’s take a closer look.
Home Prices & Sales Activity
Real estate experts predict a whirlwind market for 2022, with both home sales and home prices expected to increase. Rates for 30 year fixed mortgages are predicted to slowly rise throughout the year, due to a combination of the pandemic subsiding and inflation lingering. By the fall, these higher mortgage rates, in combination with already high housing prices, are predicted to discourage real estate speculators from entering the California real estate market, giving first-time homebuyers a greater chance at buying a house in California.
Certain economic trends, such as a tight home supply and increased demand, will give sellers the upper hand in negotiating throughout the year. Potential homebuyers should be prepared for bidding wars on many homes, especially when more buyers are shopping in the spring and summer months. Of course, there’s no way to predict what will happen, but many experts agree that prices will continue to climb throughout 2022.
Prices rose quickly and substantially in 2021, especially for hot real estate markets, including those in California. Experts predict continued buyer demand in both downtown centers and the suburbs, although pandemic-driven price gains could slowly reduce the cost-benefit of moving to outlying suburban markets. As local economies rebound throughout the state and more people become comfortable with in-person activities, the lure and appeal of city amenities will attract more buyers.
One factor that may help relieve those entering the market is the increase in 2022 conforming loan limits. This recent change may allow buyers to put less money toward a down payment or purchase a larger home without necessarily securing a jumbo or high balance loan.
Rapid inflation is predicted to play a key role in real estate in 2022. Rising housing prices will likely encourage some households to find ways to save on housing costs. Others will see the fixed, regular cost of a long-term mortgage as a hedge or buffer against inflation. As rents continue to rise and mortgage rates remain relatively low, it is predicted that potential homebuyers who have the means to afford a down payment or who can secure home loan financing will likely choose to purchase instead of rent — adding to increased housing demand and rising prices.
One thing is for sure: remote work is here to stay. While many employees and employers alike are eager to return to work, the traditional workplace as we know it may never look the same again. Many large corporations have declared their plans and intentions to embrace a remote office setup, even post-pandemic. Recent research proved that remote work positively impacted overall employee experience, and nearly all respondents (95%) reported a higher productivity level when working remotely.
Moving to a remote-first model not only demands a tremendous shake-up of how people interact and engage daily, it also opens up a whole new world of possibility when it comes to buying a house in California. Without the geographical restraints of a central office or workplace, buyers can cast a wider net when shopping for a new home.
The Bottom Line
Most Californians looking for a new home also have an old one to sell. But the traditional model is built to benefit lenders and real estate agents, not homeowners. Reali unlocks a smarter and less stressful path to your next home — no double mortgage required.
If you’re considering investing in California real estate, working with a Reali agent can help set you up for success. Equipped with unmatched local market knowledge, your trusted Reali agent will showcase your home’s best assets, impress buyers, and sell your home quickly for the highest possible price.
About The Author
Portia Green is a highly experienced full-time REALTOR® specializing in the representation of Sellers, heralded by her clients as data-driven and an effective negotiator. Producing $25M total in residential sales volume, Portia's goal is to help her clients achieve the best results when selling their homes and to make their experience an enjoyable one. She has successfully sold real estate since 2008 and has gained an in-depth knowledge of local real estate markets & seasonal trends. Portia has achieved a 100% customer satisfaction rating and wants to share her expertise & personal service with you in the sale of your home. When listing your home with Portia Green and Compass, you'll receive the hands-on service you need and desire. Portia will help you manage the entire process of selling your home from pricing, preparing and staging the house, to marketing, negotiating offers, inspections, all the way to closing. She will recommend skilled vendors for any job needed, personally host Open Houses, and ensure that all showings are accompanied. At Compass, Portia offers a wise no-nonsense way to sell your home for the best price and the least hassle. With a keen eye for staging & preparing listings to maximize Buyer appeal, all of Portia Green's listings are professionally photographed using HDR (High Dynamic Range) photography to provide the highest quality photos in the industry. Professionally printed marketing materials are prepared for all Open Houses. We also capture a 3D scan of your home that creates an interactive walkthrough online along with a custom-designed floor plan and targeted digital marketing campaigns on Google & the most popular social media channels. Compass participates in the Multiple Listing Service, which is the local real estate database of homes listed for sale that all REALTORS® use in helping their Buyers find houses. Your home will appear on every real estate website, in its best light, making a stunning camera-ready debut. Portia Green's home valuation expertise and extensive experience in comparative market analysis will help price your home accurately. She has refined her skills to help you pinpoint which features of your home will result in more showings and better results. Her mantra is for you to be ready to sell your home and feel good about that first. Portia knows that home inspectors always find a problem; that drones take some of the best photos in town; and that her eyebrows will grow to the floor in the time it takes her to read everything that's happening with your HOA, but that doesn't mean she won't do it anyway. Eyebrows be damned. You'll always need a place to unplug, connect, dream, grow, or just be yourself. That makes what Portia does even more meaningful. She’s ready to go the extra mile to help you find just the place. Whether you're selling your very first home, offloading an investment property, or want a vacation getaway with passive income, she is attentive to the details of every home sale. Portia helps busy people navigate this crazy real estate market like a pro, so don't be shy. Every great relationship starts with free advice and a friendly chat. Ask as many questions as you need to. Selling houses is her jam! www.portia.realtor