2022 Real Estate Market Forecast for California (part one)
As agents, we need to have a lot of data and do a lot of research prior to getting any information or any forecast of any sort. We need to have credible, reputable information prior to sharing it. This information comes directly from the California Association of Realtors which is abbreviated as CAR.
More homes were sold in 2021 than the number homes that have been sold per year in the last seven years. It’s predicted that we’re going to end this year selling somewhere around 440, 000 single family homes. Prices went up over 11% in 2020 and the forecast was that values and prices were only increased by about 6. 8% last year but the actual increase was 20. 3%. CAR feels that home prices are going to to write.
Here are some of the factors that have led them to this conclusion. If you look at this graph, it shows listings active on the market by month and you can see that we are still depressed with inventory in a quote unquote normal market and the lack of inventory and low interest rates should help maintain a healthy forecast for 2022. Lack of inventory should continue to keep prices increase.
Here are the reasons why a lack of inventory is not changing anytime soon. In the last 34 years, we’ve grown from a 27 million person state to a 40 million person state and we build about 2 and 1/2 times less homes per year than we did in the 1980s. So we’ve grown by 13 million people and we’re building 2 and 1/2 times less homes. Lack of supply with increase in demand causes prices to increase not decrease. California’s dubious record on housing supply and affordability. The state tells us how many homes we need to build in terms of housing affordability and we’ve only hit that number five times in the last 34 years. Although we have about a 20% increase in housing permits projected this year. Which you would assume is good. But this still leaves us about halfway a we need to be. Also, homeowners are staying in their homes longer than ever before. Averaging about 11 years, which is not helping with the inventory levels.
So, the housing market forecast for 2022 according to the California Association of Realtors looks good. Stay tuned for part two of the California Association of Realtors Forecast on the real estate market for 2022. I hope you found this informative.
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I’m a Top Producing Realtor® in the OAKLAND / BERKELEY / EAST BAY AREA. I’ve been in the San Francisco East Bay Area since I came up to do my undergrad at UC Berkeley (a long time ago!), with a short stint at UC Davis while getting my Master’s. I take my duties as a Realtor® and Fiduciary very seriously, I enjoy educating my sellers and buyers along the way. Putting People, Before Profit.
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