The California Association of Realtors has just released it’s 2022 market forecast, and CAR believes while supply constraints and higher home prices will bring the state’s home sales down slightly in 2022, transactions will still post their second highest level in the past five years.
According to CAR, California can expect a 5.2 percent decline in existing single-family home sales next year to reach 416,800 units—down from the projected 2021 sales figure of 439,800. The 2021 figure is 6.8 percent higher compared with the pace of 411,900 homes sold in 2020.
Sales may drop, but prices aren’t likely to follow. CAR projects that the median home price in California will rise 5.2 percent to $834,400 next year. That follows the projected 20.3 percent increase to $793,100 in 2021, up from $659,400 in 2020.
“A slight decline next year from the torrid sales pace of the past year-and-a-half will be a welcome relief to potential homebuyers who have been pushed out of the market due to high market competition and an extremely low level of homes available for sale,” said CAR President Dave Walsh. “Homeownership aspirations remain strong and motivated buyers will have more inventory to choose from. They will also benefit from a favorable lending environment, with the average 30-year fixed rate mortgage remaining below 3.5 percent for most of next year.”
The Association adds that demand is expected to remain strong, outpacing supply as the economy improves.