Hey guys, I have a tradition of breaking down my predictions for the coming year every January and today, we’re going to have a look at what’s likely to occur in 2022!
December’s Incredibly Low Inventory Levels
December might have been one of San Diego’s worst months in history in terms of low inventory! We only had 1,138 homes come on the market, while 1,367 homes went pending and 1,900 homes were sold! These are all extremely low figures for a typical healthy market. While I have been continuously talking about the lack of properties over the last three months, I had no idea how much worse it was going to get. Now let’s get into the predictions.
Inventory Is Coming
I do believe sellers will start entering the market in larger numbers, though definitely not enough to flood the market just yet. There are sellers out there who already have enough equity and would like to make the move to a new home, but they’re likely having trouble finding the next place themselves so they instead just sit back and delay it. Also, there are hardly any foreclosures happening, there’s a lot of equity in the market and there aren’t many new constructions happening either. Inventory levels will likely remain low but I do think it’s going to get better. We will likely see more homes come in towards the end of January moving into February. Somewhere around March is when we will likely see a healthy amount of new homes come onto the market, in the 3,000 range.
The federal reserve has already came out and mentioned that they will be increasing mortgage rates to around 3.5%. Buyers out there shouldn’t worry too much as it’s unlikely that it will increase much above that.
I think home values will continue to increase, though not up to 20% as we saw last year. However, we will likely see 6-8% appreciation in most markets. We’re still seeing a lot of people relocate here from more expensive markets like the bay area, New York, etc. We also have high-income earners here who can afford to make expensive property purchases, and of course, the lack of inventory.
Developers Will Make Moves
There was definitely a lot of hesitation from developers to start projects amidst the rapid inflation and lack of labor supply in the market. I anticipate that the labor force will get back into the working environment and help restart things.
Are you a seller and are worried about finding your next home? Come have a chat with us today! We have an amazing trade-in program. This allows you to remove the equity from your home and put it into your next home purchase without even having to wait to finish the sale on your existing property. We will also deal with the hassle of staging the home, showing it to buyers, etc.
Don’t be afraid of the rising interest rates! I believe it will actually cause a market slow down, by driving some buyers away just enough for you to be able to get in there and find your new home.
We hope you enjoyed this article!
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