Where are we headed as we get closer to 2022?
Is the California residential market ready to surge in 2022?
The California Association of Realtors (CAR) just released its own outlook on the state’s housing market for 2022. They forecast fewer sales and a price rise of 5.2% in 2022. For buyers and renters, the outlook may be for higher prices, as some cities are already seeing rent growth.
Unfortunately, the number of prospective homebuyers applying for new purchase applications continues to dwindle from 2020 levels with the last week of October representing the 23rd consecutive weekly decline.
The number of properties receiving 4 or more offers has been moderating, according to results from the latest survey of California REALTOR® members (CAR). Last week, 49% of respondents reported that their last transaction had at least 4 offers, which is down from nearly 72% this May. However, California REALTORS® also report a market that is far from cool as roughly half of members still had more than three offers on their last closed sale.
In the last week of October, the housing market suffered through its third consecutive weekly increase in mortgage rates, which hit 3.14% according to Freddie Mac’s survey. This is another 6-month high and will likely push the October monthly figure above 3% for the first time since July. With the Federal Reserve set to taper starting in November, interest rates will likely climb further before the end of the year. Meanwhile, supply will shrink as the holiday season begins.
END OF YEAR ADVANTAGE?
As the market moves towards the end of the year, new active listings are expected to shrink as homeowners put their selling plans on hold due to the upcoming holidays. However, this should not deter certain home-owners who are keenly aware that demand is still outpacing inventory and will take advantage of this fact to list their home (as prices are not dropping by any means). By the same token, “serious” home-buyers should look towards the holidays as a great time to find a home as fewer buyers are out competing for inventory in Los Angeles.
- California Association of Realtors & Jacolyn Bron