The California Association of Realtors forecasts a cooling trend in the housing market next year, with sales of existing single-family homes dropping and the pace of price hikes slowing.
CAR predicts 416,800 existing single-family homes will be sold in 2022 — 5 percent less than the projected number for this year.
The report, released today, also forecasts that the state’s median home price will rise by 5 percent next year, to $834,400. That would be a welcome downshift, according to the trade group. It expects this year to finish with a 20 percent jump in the statewide median price, to $793,100.
“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,” Dave Walsh, CAR’s president, said in a release.
The statewide moderation would follow a trend that appears to already be in the works in L.A.’s single-family market, where sales prices have recently been coming off record highs.
One recent report found that L.A.’s September median listing price of $915,000 was $25,000 lower than for two months earlier. The same report highlighted a key reason that talk of a housing crunch abounds in the market, finding that a standard mortgage on a median-priced listing would eat up more than 81 percent of the average resident’s monthly salary. L.A. ranked as the third-least affordable housing market in the nation, according to the report, behind New York and Miami.
CAR’s projection of another year of increases in the statewide median — albeit at a slower pace — reflects California’s lack of available existing homes for sale amid constrained production of new housing.
Last month in L.A. County, only 2,489 single-family homes hit the market, according to a Douglas Elliman report. That was less than half the number of new listings for the county in September 2020, when pandemic buying was at a frenzy.
Analysts predict the inventory shortage won’t improve much even as California politicians, including Gov. Gavin Newsom, have made a recent push to address the state’s housing crunch.
“It’s very challenging,” appraiser Jonathan Miller, who authored the Elliman report, said earlier this week. “And if you look at the market going forward … there’s no expectation, at least in the near future, of the inventory problem being resolved.”
The CAR report also forecast that housing demand would continue to increase statewide in less expensive areas because of remote working, and that mortgage rates would rise slightly but remain relatively low.