What to Expect in the 2022 Housing Market | January Orange County Housing Market Update
It is safe to say the last two years in real estate have been insane, and there are a ton of opinions about what is going to happen in the housing market in 2022.
The biggest question I get asked - how long can this price appreciation in the housing market continue? While it’s difficult to answer, many experts believe that appreciation will now start to plateau.
In San Clemente, we still have an extremely hot market and very little inventory is putting a lot of pressure on new listings. If a home is priced correctly, it will sell quickly with multiple offers.
How long will it stay that way? The Fed plans to increase interest rates at least three times in 2022 to decrease affordability and stifle the crazy appreciation we have been experiencing.
It is important that we keep an eye on interest rates as that will be a key factor in slowing appreciation.
Here are a few of the statistics we saw in San Clemente:
- The median price of a single-family residence in San Clemente skyrocketed to $1.63m in December 2021, up from $1.15m in December 2020.
- On average in December 2021, a single-family home sold for nearly 103% of the list price.
- The median price of condos and single-family attached homes rose from $695k in December 2020 to $913k in December 2021.
- The amount of inventory in December 2021 was half as much as it was in December 2020.
So, to briefly summarize, until inventory loosens up and interest rates rise, it will be difficult to slow down housing appreciation.
The last thing I wanted to mention - SB 9 and SB 10 went into effect on January 1, 2022 in hopes to alleviate California’s housing crisis by effectively putting an end to single-family zoning in neighborhoods statewide. We don’t know the effect they are going to have on our neighborhoods, but I am starting to hear developers and investors wanting to take advantage of these new laws.
(SB 9 & 10 Explained - https://youtu.be/oQLporv6uoI)
In addition, ADUs, or Accessory Dwelling Units, are also gaining momentum throughout our local communities to be used as a casita or rental unit.
(The Value of an ADU - https://youtu.be/4Xnojt5MB6w)
If you have any questions about the housing market or these new housing laws, schedule a call with me through this link, https://calendly.com/ryanschramm.