Bay Area Housing Inventory Could Increase in 2022 (or Even Sooner)

From an inventory standpoint, 2021 has been a tough year for home buyers in the San Francisco Bay Area. Low supply levels within the local housing market, combined with strong demand from buyers, have made it harder for some people to find and purchase a home. (Harder, but not impossible.)

Now, many home buyers are wondering if Bay Area housing market inventory will improve in 2022? Will more homes come onto the market next year? Will we see an increase of supply within the real estate market?

In other words, will it get easier to buy a home?

While the inventory situation within the Bay Area housing market has remained stagnant for months, there are signs of growth on the horizon. If current trends are any indication, we could see some much-needed supply gains later in 2021 and into 2022.

More Bay Area Housing Market Inventory In 2022?

A July 2021 report from the California Association of Realtors showed that Bay Area housing market inventory situation is still very tight. According to that report, the San Francisco-Oakland-Hayward metropolitan area had about a 1.4-month supply of homes for sale as of June 2021.

That’s a very low level of supply, from a historical standpoint. It also illustrates why the Bay Area is still a seller’s market (and probably will be for a while).

But there may be some relief on the horizon, from a housing market inventory standpoint. A separate report published by Realtor.com in July showed that new listings rose by 15% from June 2020 to June 2021. This means there are more properties coming onto the market in summer 2021, compared to a year ago.

Overall, however, Bay Area housing market inventory levels are still lower today than they were a year ago. Though it’s good to see an increase in new listings.

These reports show that the inventory situation remains tight within the San Francisco Bay Area real estate market – but also that it might be starting to improve. It’s too soon to say if this rise in new listings is the start of a sustained trim, or a short-term blip on the radar. If it continues, we could see more Bay Area housing market inventory in 2022 compared to where we are right now.

What Supply Growth Might Mean for Home Buyers

To recap, we are starting to see signs that there might be more homes for sale later this year and in 2022. Of course, we can’t say for certain what the Bay Area real estate market might be like next year. But current trends suggest that there might be some inventory growth in the months ahead.

So what would that mean for home buyers in the area?

A significant increase in housing market inventory would be a positive trend for home buyers, any way you look at. For one thing, it would give buyers more properties to choose from during the house-hunting process. This would make it easier to find a suitable home that falls within your budget.

An increase in Bay Area real estate market inventory would also mean less competition for buyers. Currently, house hunters in the region have to compete fiercely with one another due to tight supply conditions. An overall increase in housing supply would have a general cooling effect on the real estate market, by easing competition among buyers.

Lastly, an increase in Bay Area home inventory could cause house prices to rise more slowly going forward. This too would be a positive trend for buyers – and for the real estate market in general. The big, double-digit price gains we’ve seen over the past year are generally not sustainable over the long term. Too many home buyers have been “priced out” of the housing market do to rapid price growth. A rise in real estate inventory might cool things down a bit.

It’s Still a Tight Market for Now

But all of this is somewhat speculative. While it’s true there are more new listings coming onto the market in the Bay Area, the supply and demand situation is still very lopsided in favor of seller’s.

Home buyers currently have to work hard to find a suitable property within budget. In many cases, they have to rethink what “suitable” even means. That’s just the current reality of the Bay Area housing market in 2021.

But 2022 could be a different story. Numerous reports have shown an increase in real estate market inventory nationwide, and also here within the San Francisco region of California. If that trend continues over the coming months, we could see some much-needed inventory growth within the Bay Area housing market in 2022.

In the meantime, home buyers will have to be patient, persistent and open-minded during the house-hunting stage. Those are important attributes for anyone who plans to buy a house in the highly competitive Bay Area real estate scene in 2021 or 2022.