California Housing Market Report 2022
With interest rates rising, the corresponding increase in mortgage rates is beginning to make itself felt in housing markets across the United States. While rising mortgage rates make borrowing more expensive and reduce affordability, they can also dampen demand by dissuading potential buyers from actively shopping for a home, according to the Mortgage Reports. The reduction in buyers can help loosen the squeeze on many housing markets’ diminishing available inventory.
The California housing market is in a league of its own. However, many of the state’s largest cities have seen a marked fall in home sales in 2022 versus 2021. Using housing data from Redfin, we analyzed several of California’s largest cities and the state of their housing markets in recent years. Read on to find out more about some of California’s largest housing markets as 2022 unfolds.
Los Angeles Housing Market 2022
The Los Angeles housing market in 2022 shares several characteristics with other California and American housing markets in general: Rising prices, declining inventory, homes going off the market quickly. However, the Los Angeles housing market is in better shape than other cities in California. The average number of days a home for sale spends on the market before being bought up is 36 days as of February 2022, down 28% from an average of 50 days in February 2021. However, this is much longer than the San Diego housing market, where the average number of days on market for a home is only 8 days in February 2022. The months of supply of homes — which is how long it would take the available supply of homes to be bought up if no new homes come on the market — stands at 1.9 months in February 2022. That’s down from 3 months’ supply in February 2021, but again, it’s better than San Diego’s months of supply of homes in February 2022, which is 0.7 months.
Over the last year, the median sale price in Los Angeles rose by 11.2%, from $850,000 in February 2021 to $945,000 in February 2022. During that same period, housing inventory in the Los Angeles housing market declined by 41.3%, from 6,119 available homes in February 2021 to 3,590 homes in February 2022. Home sales fell by 9%, from 2,063 in February 2021 to 1,877 in February 2022, but still remains higher than the number of home sales in February 2020, when there were 1,630. New listings are down even more, 15%, from 2,842 new listings in February 2021 to 2,416 in February 2022.
San Diego Housing Market 2022
The San Diego housing market is hotter than that of Los Angeles. The median sale price in San Diego has risen by 17.2% in the last year, from $705,000 in February 2021 to $826,000 in February 2022. Housing inventory in the San Diego housing market fell by a greater percentage (45.3%) than in Los Angeles (41.3%) over the last year, going from 1,223 available homes in February 2021, down to 669 homes in February 2022. San Diego homes are getting bought up quickly this year, with the number of days on the market falling by 46.7%, from 15 days in February 2021 to 8 days in February 2022. San Diego’s months of supply of homes is also dwindling, falling from 1.9 months in February 2020 to 1.1 months in February 2021, and then even further, to 0.7 months in February 2022. New listings in San Diego also declined over the last year, but not at the rate of the Los Angeles housing market: 9.7% year-over-year in San Diego versus 15% in Los Angeles.
San Francisco Housing Market 2022
The San Francisco housing market in 2022 is also experiencing an inventory squeeze, with available homes for sale falling by 30.2%, from 1,177 homes in February 2021 to 821 homes in February 2022. Thus, the rate of decline is not as steep as in Los Angeles, San Diego, and San Jose. Home prices increased by 10% over the last year, from a median sale price of $1,350,000 in February 2021 to $1,485,000 in February 2022. In terms of months of supply of homes, San Francisco is in better shape than other major California housing markets. San Francisco’s months of supply of homes fell by 31%, from 2.9 months in February 2021 to 2 months in February 2022. The biggest year-over-year change was in the number of days on the market a home spends before getting bought. In San Francisco, the average number of days fell by 61.4%, from 44 days in February 2021 to 17 days in February 2022, though this equals the 17 days on market reported in February 2020. Whereas home sales were down year-on-year in Los Angeles, San Diego, and San Jose, in San Francisco home sales increased by 0.2%, from 408 sales in February 2021 to 409 sales in February 2022.
Standout Findings of the California Housing Market in 2022
One of the biggest findings in the analysis of California’s major housing markets is the rise in home prices in Irvine. The median sale price in Irvine was $890,000 in February 2021, before increasing by an impressive 49.4%, reaching a median sale price of $1,330,000 in February 2022. Out of all California cities with populations of at least 100,000, Irvine’s home price increase is the largest in the state. The second-largest growth in home prices occurred in San Mateo, where the median sale price rose by 44.3%, from $1,128,000 in February 2021 to $1,627,500 in February 2022. Both of these cities have seen their housing inventory fall by more than half. In Irvine, available inventory dropped by 59%, from 500 available homes in February 2021 to 205 homes in February 2022. In San Mateo, the year-over-year decline in inventory was 52.9%, from 136 homes in February 2021 to 64 homes in February 2022.
Content Courtesy of Forbes.com