CALIFORNIA - California's housing market is facing challenges. The biggest challenge is the end of pandemic stimulus payments. This could throw a lot of homes onto the market. Also, the eviction moratorium is set to expire, which could put many homes on the market. California's unemployment rate is still high, but it has been improving. Nevertheless, it is still among the highest in the nation.
San Francisco Home Sales Down One-third Year Over Year
While San Francisco home sales have hit record highs in recent years, the market has plateaued. The California Association of Realtors reported a 37.2 percent drop in July home sales. While the housing market in San Francisco continues to be competitive, interest rates are beginning to affect prospective buyers. At the same time, the inventory level is increasing. This could lead to more listings on the market in the second half of 2022.
While home sales in the Bay Area are down by about a third year over year, San Francisco continues to lag behind Silicon Valley, where the declines have been the most significant. As a result, the median price of existing homes fell 8.2% from last year. The South Bay region has seen a smaller decline but is catching up quickly.
San Jose Home Values Rose 15.1% Year Over Year
In May of 2023, San Jose home values were $1,516,655. This was up over twenty-five percent over the previous year. Homes in San Jose sold after an average of eight days on the market, compared to eleven days in May of 2012. That means the median price of a home in San Jose was up over fifteen percent in just two years.
Although the San Jose housing market is experiencing a housing shortage, the overall number of available homes continues to rise. The ZHVI (Zohl's Home Value Index) represents the housing stock and homes sold in a given month. The chart below shows how San Jose's housing inventory has fluctuated over the past three years. The first-time homebuyer will likely face many obstacles as real estate investors compete for the lowest-priced properties. Millennial homebuyers will likely find it hard to outbid real estate investors and could end up renting the property.
San Francisco Home Values Will Increase By 7% By May 2023
If you're planning to buy a home in San Francisco, now is the time to do so. In the next five years, property values in the Bay Area are projected to increase by 7%. In the short term, supply will increase slightly. However, supply is expected to remain tight relative to the rest of the country. In addition, sluggish construction of new homes has been a drag on the housing market, so it may take a little longer for prices to increase.
In the long run, the trend of rising home values is likely to continue. According to a report by GOBankingRates, median home values in major U.S. cities will increase by 7.5% by May 2023. The median home value is a key indicator in the forecasting process.
Sacramento Home Values Will Rise By 7% By May 2023
The real estate market in Sacramento has remained stable despite several factors, including low inventory levels and pent-up demand. With low housing inventory and increasing demand, home prices in the region are likely to keep rising. Many people in the Bay Area have begun to consider moving to Sacramento because it is much more affordable than the surrounding coastal markets. The region's population has grown by over 10% over the past decade, so there will be more opportunities for real estate investors.
With less than two months of inventory, the Sacramento housing market will likely continue to see high competition and an insufficient supply of inventory. This means that home prices in Sacramento will likely increase by as much as 15.8% in the next year. However, despite the tight housing market, Sacramento has attracted an increasing number of buyers, which could be good for the housing market. Sacramento's economy is also stable, with a healthy job market and a steady population.