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Report: Bay Area Might Have More Homes for Sale in Summer 2022

According to a recent report, a lot of homeowners are planning to list their homes for sale within the next four months or so. If this is true, the undersupplied Bay Area real estate market could experience some much-needed inventory gains by the end of summer 2022.

And as anyone who has recently tried to buy a house will tell you, we could certainly use more homes coming onto the market. Tight inventory conditions in our area have challenged buyers over the past year.

More Homes for Sale During Summer 2022?

Earlier this month, researchers from published a report that was based on a survey they conducted back in February. They surveyed thousands of people to ask about their plans for selling a home. According to the authors, this survey provided a “nationally representative sample of U.S. adults.”

It also suggested that we could see more homes coming onto the Bay Area real estate market, between now and the end of summer 2022.

Back in mid-February when the survey was conducted, 64% of people planning to sell a house in 2022 said they would do so within the next six months. Since the survey was conducted in February, that puts their planning through mid-August of 2022.

If the seller survey reflects their actual actions, we could see an increase in the number of homes for sale in the Bay Area by the end of summer 2022. That would provide some much-needed relief for home buyers, many of whom have been squeezed out of the market due to tight inventory conditions and rising prices.

Sellers Feeling Confident When It Comes to Pricing

The survey cited above also revealed that 42% of sellers plan to ask for more than their home is worth. In other words, they plan to set their asking price above what an appraiser might tell them the property is currently worth.

You might think this would be a foolish pricing strategy. But one thing we have learned from the Bay Area real estate market over the last couple of years is that many buyers are willing to offer more than the asking price. In fact, this has been one of the most prominent trends within the Bay Area housing scene through 2021 and into 2022.

An ongoing supply shortage has created a situation where buyers often have to “bid up” the sale price, just to compete with other buyers. As a result, many homes have been selling for more than the original list price. It’s a sign of the times — for now at least.

This could partly explain the confidence of the 42% of survey respondents, who said they would be asking for more than their homes are worth. Clearly, these homeowners feel emboldened by recent trends within the housing market.

According to the April 2022 report:

In a positive sign that homeowners are serious about listing, many sellers are already getting their home ready. However, they’re doing so with great expectations of the current market, which means buyers should prepare for sellers asking for high offer prices, quick closes, waived contingencies and more.

In other words, expect the market to remain competitive for the foreseeable future.

Related article: How much is that home worth?

More Inventory Is Sorely Needed

The San Francisco Bay Area real estate market can certainly benefit from more homes coming out of the market. We’ve been dealing with a chronic low-inventory situation for many months now.

According to a recent report from the California Association of Realtors, the “unsold inventory Index” for the San Francisco Bay Area real estate market was around 1.6-months in early spring. That’s essentially the same as a year ago, and still indicative of a strong seller’s market.

A more balanced housing market would have closer to a 5-month supply of homes for sale. It will be a while longer before we see anything like that. So we’re talking about a very tight real estate scene, especially when measured by the number of homes for sale.

If the survey cited above turns out to be accurate, those who are planning to buy a home in the Bay Area during summer 2022 might have more properties to choose from. Even so, buyers will want to be prepared for stiff competition. This means conducting thorough market research and having financing lined up ahead of time.

Mike Trejo

Mike Trejo is a Bay Area mortgage broker with 20+ years of knowledge and experience.

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