Here’s Why 2022 Is a Good Time to Buy a Home in the Bay Area

Is now a good time to buy a house in the San Francisco Bay Area? This is one of the top questions among would-be home buyers in our region, and rightfully so.

The Bay Area real estate market has gone through some major changes over the past couple of years, so it’s only natural to wonder if now is a good time to buy a home.

While the market remains highly competitive and continues to favor sellers, it does appear to be moving in a more buyer-friendly direction. For example, a recent report showed a significant improvement in the inventory situation, with more homes hitting the market in 2022.

Is 2022 Still a Good Time to Buy in the Bay Area?

But back to the question at hand: Will the rest of 2022 be a good time to buy a home in the Bay Area?

There are some personal and financial components to this question, that only the individual buyer can answer. But from a market and investment standpoint, 2022 is still a good time to buy a house in the San Francisco Bay Area.

In fact, the real estate market is starting to shift in a favorable way for buyers. More homes are coming onto the market, and the overall pace has slowed down a bit. So those buyers who make a purchase in the second half of 2022 might have an easier time finding a suitable property.

Those are two reasons why 2022 is a good time to buy a home in the Bay Area. Let’s take a deeper dive into these real estate market trends…

Reason #1: More homes are coming onto the market.

Earlier this month, Realtor.com published a housing market report with data for the nation’s 50 largest metro areas. According to that report, the Bay Area real estate scene has experienced significant inventory growth over the past year.

In May of 2022, active real estate listings within the San Francisco-Oakland-Hayward metro area rose by 32.5%. There was also a measurable increase in the number of newly listed homes.

This is a big deal for Bay Area home buyers. For the past couple of years, our real estate market suffered from record-low inventory levels. Supply was so low that some buyers gave up out of frustration, or at least put their purchasing plans on hold.

But the housing market “drought” now appears to be easing, as more and more properties come onto the market.

According to Danielle Hale, Realtor.com’s chief economist:

Our updated 2022 forecast anticipates that demand will continue decelerating through the summer, providing breathing room for the inventory recovery to accelerate. As a result, this fall could be an opportune time to find a home…

That’s reason #1 why 2022 is still a good time to buy a home in the Bay Area. There are more properties available today when compared to last year, and inventory could continue to grow going forward.

Reason #2: The real estate market has slowed a bit.

Another housing market trend could make it easier to buy a home during the second part of 2022. This one relates to the overall pace of the housing market.

According to the California Association of REALTORS “April Home Price and Sales Report,” home sales in the San Francisco Bay Area declined by 18% compared to a year earlier.

To quote that report: “The San Francisco Bay Area (-18.1 percent) and Southern California (-16.0 percent) were the other two major regions [of California] with sales declines exceeding 10 percent from a year ago.”

There are several possible reasons for this trend. One is that prices have risen substantially over the past couple of years, so there are fewer buyers who can afford to make a purchase.

But for those who can afford to buy a home in the Bay Area, the second part of 2022 could be a good time to do so. The regional real estate market might be a bit calmer than it was last year, with fewer (and slower) home sales. This would give buyers some relief from the fast-paced conditions we saw in 2021.

A Sense of Urgency Is Still Warranted

For a lot of folks, the latter half of 2022 could be a good time to buy a home in the Bay Area. But that doesn’t mean you should procrastinate.

Home prices continue to climb in most cities across the region. Buyers who delay their purchases until later this year could encounter higher costs.

Mortgage rates deserve some attention as well. The average rate for a 30-year fixed mortgage rose by around 2% during the first four months of 2022. And with everything going on with the U.S. economy (inflation, rate hikes, etc.), rates could climb further over the coming months.

The bottom line: From an investment and market-conditions standpoint, 2022 is still a good time to buy a house in the Bay Area. But a sense of urgency is still warranted among buyers.