Outlook: Buying a Home in the Bay Area During Summer 2022

The Bay Area real estate market has been highly competitive for the past couple of years. Even more so than usual. Home buyers have had to contend with rapidly rising prices, shrinking inventory, and stiff competition from other buyers.

Now, many are wondering what the Bay Area real estate market will be like during the summer of 2022. Will it be a good time to buy a home? Or will buyers continue to struggle with the market forces mentioned above?

Recent reports offer some hope for Bay Area home buyers, suggesting the market could become more buyer-friendly in the weeks ahead.

Current Conditions in the Bay Area Housing Market

As of late May 2022, inventory continues to be the biggest challenge for home buyers in the Bay Area. Or rather, a lack of inventory.

While real estate conditions can vary from one city to the next, the Bay Area as a whole currently has around a one-month supply of homes for sale. That makes it a seller’s market, from a supply-and-demand perspective.

In terms of home prices, we have seen a steady increase over the past couple of years. As of May 2022, the median home value for the San Francisco-Oakland-Hayward metropolitan area was nearly $1.5 million.

Related article: Will home prices ever go down?

But we’re beginning to see signs that the Bay Area real estate market might be cooling off of it, as we approach the summer of 2022.

For instance, a recent report showed that home sales were down significantly compared to a year ago. Home sales in the region are down 17.2% over last year, according to the latest RE/MAX national housing report.

To quote the May 2022 RE/MAX report: “We’re starting to see a cooling in sales … That should create more balance over time, countering the frenzied seller’s market we’ve had for so long.”

More inventory has been coming onto the market lately, as well. These trends could bode well for those who are planning to buy a home in the Bay Area in summer 2022.

Outlook: Buying a Home During Summer 2022

Home buyers who are planning to make a purchase during the summer months will encounter higher prices and mortgage rates, compared to those who bought last year. But they could also have more inventory to choose from, and less competition from other buyers.

Slowly but surely, the Bay Area real estate market is starting to move in a positive direction for buyers. Here are some of trends that could affect you when buying a home over the summer:

• Slower price growth. As mentioned above, the median home price for the San Francisco Bay area rose significantly over the past couple of years. Those who are planning to buy during the summer of 2022 will encounter higher costs. But prices could begin to level off a bit over the coming months, which could ease some of the pressure on buyers.
• Higher mortgage rates. At the start of 2022, the average rate for a 30-year fixed mortgage loan was around 3.2%. As of last week, that average had climbed to 5.1%. That’s based on the weekly survey conducted by Freddie Mac. Higher mortgage rates have compounded the effects of general inflation. This trend could affect the Bay Area housing market as well, by reducing demand among home buyers.
• Less competition? Local real estate broker Tim Yee recently told CBS Bay Area News: “I think we’re seeing a little bit of leveling right now in the market … Properties are staying on the market a little longer, pricing seems to have leveled and we’re seeing some price reductions which, six months ago, we never saw.” In other words, the local housing market is becoming more buyer-friendly.

The bottom line is that the Bay Area real estate market is starting to change, and it could benefit those who are planning to buy a home during summer 2022.

Over the coming months, local buyers might enjoy more inventory and a less frenzied pace within the real estate market. That could make it easier to buy a house. On the flip side, housing costs have risen as well, and inflation continues to put the squeeze on some households.