San Jose Housing Market Forecast 2022: Prices to Keep Climbing?

Given the rate at which San Jose home prices have risen over the past year, it’s hard to believe that forecasters are predicting continued price quote in 2022.

But that seems to be the case. A recent forecast for the San Jose, California real estate market in 2022 predicted that home prices would continue to climb over the coming months. This prediction was issued by housing market analysts from Zillow.

And when you look at the current supply-and-demand situation in the San Jose area, you can understand why they would make such a prediction.

Big Home-Price Gains Over the Past Year

This past year was a big one for the San Jose, California real estate market. Home prices in the area Rose add an unprecedented pace and reached an all-time high.

According to the latest data, the median home value for San Jose real estate market rose by around 18% over the past year alone. The median or mid-level price point was around $1.3 million, as of December 2021.

Within the broader San Jose-Sunnyvale-Santa Clara metropolitan area, the median home value recently rose above $1.5 million for the first time ever.

Related: California home equity is way up

Giving these trends, it’s only natural to wonder what 2022 will bring for the San Jose housing market. What’s the long range forecast for this highly competitive real estate scene? According to at least one forecast, home prices within the San Jose metro area will likely continue to climb throughout 2022.

Housing Market Forecast for San Jose in 2022

According to a recent prediction from Zillow, the San Jose  housing market could see double-digit price growth in 2022 as well. As of mid-December, the real estate data company was predicting that the median home value would rise by around 10% over the next year.

To quote to the company:

San Jose-Sunnyvale-Santa Clara Metro home values have gone up 16.6% over the past year and Zillow predicts they will rise 10.1% in the next year.

It’s hard to believe that a metro area with a median house value that now exceeds $1.5 million could continue to rise at such a pace. To understand why, you simply have to look at the current supply-and-demand situation within the San Jose housing market.

Lopsided Supply and Demand

As of November 2021, the San Jose metro area real estate market had a 0.5-month supply of homes for sale. That is miles below what is considered to be a normal or balanced real estate market.

In fact, that’s one of the lowest inventory levels of any local housing market in the United States, as of December 2021. This is partly why San Jose housing forecasts for 2022 predict continued price growth for the foreseeable future.

We can also see how highly competitive this market is by looking at how quickly homes are selling, and for how much. Recent reports showed that houses for sale in the San Jose area spent a median of just 11 days on the market. That statistic indicates a fast-moving and highly competitive real estate scene.

Real estate sale prices also shed light on the competition level within the San Jose housing market. Last month, more than 70% of homes sold in the area were sold for more than the original list price. That kind of thing happens when buyers attempt to outbid one another due to stiff competition for homes.

Oddly enough, however, a recent report showed a slight decline in home sales within the San Jose real estate market. According to the California Association of REALTORS, home sales in the San Jose-Sunnyvale-Santa Clara metro area declined by 4.2% from November 2020 to November 2021. This suggests that the San Jose real estate market might be cooling down a bit, as we head into 2022.

Even so, the local real estate scene will continue to favor sellers over buyers due to record-low inventory levels and competitive bidding.

Disclaimer: This article includes housing market predictions for San Jose, California in 2022. Those forecasts were issued by third parties not associated with our company. Real estate-related predictions are the equivalent of an educated guess and should be viewed as such.