- Will the Orange County Housing Market continue to skyrocket in 2022? From October of 2020 to October of 2021 the median home price rose 15.7%! Even more impressive was the 20% increase in existing single family houses over the same time period. The housing market started the year in an extremely HOT seller’s market, but many people are wondering how long this madness can last. I’m Tim Hamilton with StellarQuest Real Estate. In this video I will be going over Steven Thomas’s 2022 housing market prediction after giving a quick overview of where the housing market is today. If you want to stay up to date on the housing market make sure you subscribe to our channel. If you’re thinking about buying or selling a home in Southern California please feel free to call, text, or email me anytime if you want my help. All of my personal contact information is in the description below.
- We started the year with a record low number of homes for sale, right around 1,000 in Orange County. 2021 started with about 2,500 homes which was the prior record low. The number of homes for sale is currently so low that it is suppressing the total number of closed sales, and it is also making it difficult to gauge what true buyer demand is. At the start of the year the demand reading was at about 1,600 pending sales, which was the lowest level since January 2020. But, if there were more homes on the market, this number would likely be higher. With an extremely low supply of homes for sale, and strong buyer demand the market remained extremely HOT throughout the Holidays. Historically the market would cool off during the holiday season. During the last 2 weeks of the year, the expected market time dropped from 21 to 20 days, which matched the record low in November. Anything below 60 days is considered a HOT sellers’ market. Homes are selling extremely quickly, appreciating in value, and in some cases receiving multiple offers.
- Now we are going to get into Steven Thomas’s forecast for 2022. He expects closed sales to decrease by about 3-6% compared to 2021. This is still a strong number because 2021 had the most sales since 2005. The number of homes for sale will mostly likely grow and peak around 5,000 in August. This is much more than the roughly 2,600 home peak we saw in 2021 but is still well below the over 7,000 home peak we saw in 2019. This would be a positive step toward the inventory returning to a more normal level. It would help ease the extremely HOT seller’s market and would give buyer’s more options to chose from. Buyer demand will likely remain extremely strong from the start of the year through the Summer Market. High buyer competition will likely result in buyer’s being willing to stretch above the asking price, which is why Steven Thomas is expecting appreciation around 8%-10% for the year. Most of this appreciation is likely to occur from January to July.
- One large factor that plays a large role in the housing market is interest rates. He expects rates to remain at this historically low level until things improve dramatically, which is more likely to occur in the second half of the year. Even then, rates will likely have a hard time getting above 3.5%. Long term he expects rates to bounce between 2.75% and 3.5%. If rates remain in that range, the market will likely remain HOT. Steven is not expecting a large wave of foreclosures to hit the market because the number of homes in forbearance has decreased substantially. He thinks there will be slightly more distressed sales in 2022, but it will not be anywhere near enough to impact the broader market.
To summarize he expectations, the year will start in an Insanely HOT sellers market where multiple offers and bidding wars will be common for homes priced under $2 million. The market will heavily favor sellers, and they will get to call most of the shots during the negotiation. Home prices will most likely continue to sell quickly and rapidly increase in value through July. At that point it is possible that the market will cool slightly from an Insanely HOT seller’s market to a more normal HOT sellers’ market. If you want to read the full report please let me know and I will send you a copy. If you’re thinking about buying or selling a home please call, text, or email me anytime. I am more than happy to answer your questions and help you out with that. You can find all of my personal contact information in the description.
StellarQuest Real Estate – Lic. # 02077900
Tim Hamilton
Broker Associate – Realtor®
Lic. #01959966
(714) 486-4086
timsellsca@gmail.com
www.StellarQuest.com