2022 Year in Review and Outlook

2022 Year in Review and Outlook
2022 was a turbulent year for the US housing market, as inflation, soaring interest rates, and elevated sales prices combined to cause a slowdown nationwide. Affordability challenges continue to limit market activity, with pending home sales and existing-home sales down month-over-month and falling 37.8% and 35.4% year-over-year, respectively, according to the National Association of REALTORS® (NAR). Higher mortgage rates are also impacting prospective sellers, many of whom have locked in historically low rates and have chosen to wait until market conditions improve before selling their home. 

Economists predict sales will continue to slow and housing prices will soften in many markets over the next 12 months. However, national inventory shortages will likely keep prices from dropping too much, as buyer demand continues to outpace supply, according to NAR. Even if prices fall, many prospective buyers will find it difficult to afford a home in 2023, as higher rates have diminished purchasing power; however, rates are much improved from where they were around Halloween of 2022. 

There are many on the sidelines who think we will experience a Great Recession (2007-2009) but the current data doesn't support that statement at all.  The unsold inventory remains much lower than in the years leading up to the Great Recession because the supply of available homes today remains at very low levels.  The number of homes available today in San Diego County is around 3,000.  In comparison, the inventory in 2006 exceeded 15,000 homes and it surpassed 18,000 in 2007. 

There is no real panic selling at the moment but some sellers may express more motivation than others given a certain circumstance.  Today's housing stock is built on an extremely strong foundation with years of tight lending standards due to financing laws enacted after the Great Recession i.e. strong credit scores, large down payments, fixed rate mortgages, plenty of nested equity and limited cash out refinances. 

The first half of 2023 will be telling of where the housing market stands and the overall outlook.  Proper pricing remains the most important marketing tool for a seller looking to sell.  Buyers continue to monitor interest rates and remain patient for the right house.  Today's market is both very interesting for Sellers and Buyers but don't let the macro real estate news influence you too much.........call or email me to discuss what is actually taking place in the local San Diego housing market.

Please call me direct at 858-220-6412 if you have specific questions about buying or selling in today's market as every situation is different.
  • Log in
  • ×