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Are you planning to buy a home in or around Napa, California in 2023? Wondering what the Napa real estate market might be like in 2023?
You’ve come to the right place! Because we’re about to break down current housing market trends in this popular Wine Country destination. Here’s what you should know about buying a home in the Napa Valley in 2023, from a real estate market perspective.
Buying a Home in Napa in 2023
Every year about this time, we examine current housing market trends and speculate about what the market might be like during the upcoming year. So here is our forecast for the Napa Valley real estate scene in 2023.
The short version is that 2023 could be a very good year to buy a home in the Napa area.
There are several reasons for this. For one thing, inventory levels have risen over the past year, giving home buyers more options to choose from. Additionally, the Napa Valley real estate market should be less competitive in 2023, due to higher mortgage rates and other factors.
Home buyers who purchase a house in Napa during 2023 will likely encounter less competition, compared to those who entered the market last year. This means they’ll be able to carefully consider each individual property, instead of rushing to put an offer in.
For these and other reasons, the Napa real estate market could offer ideal home-buying conditions during 2023.
Home Price Growth Is Slowing Down
Like most of California (and the nation as a whole), the Napa Valley experienced significant home-price growth in the second half of 2020 and all throughout 2021.
As of late 2022, the median home price in Napa, California was hovering in the upper $900,000 range. The median price in some of the surrounding cities surpassed the $1 million mark earlier this year.
But prices have slowed down considerably over the past few months, and that will affect anyone who buys a home in Napa during 2023.
According to the latest data provided by Zillow, home prices in the Napa real estate market peaked during July 2022 and have trended downward since then. Prices will probably find a “bottom” and rebound sometime in the near future. But we could see additional declines into the first part of 2023.
This is good news for those who are planning to buy a home in the Napa Valley during 2023. Slower price growth reduces the urgency level for house hunters.
Additionally, those who buy a house in the Napa area in 2023 could come in at the “bottom” of the market, where prices are concerned. So there’s an opportunity to enjoy some solid equity growth, going forward.
More Housing Market Inventory Available
Supply shortages were the big real estate news story of the past two years. California real estate markets from San Diego to Redding experienced a surge in demand that drove supply levels to record lows. As a result, home buyers had to compete fiercely for limited inventory.
But this is another area where we’ve seen significant change in recent months. Many California real estate markets are now experiencing inventory growth, giving home buyers more options to choose from. This is particularly true in the Napa Valley, where supply levels are currently hovering above statewide and regional averages.
As of October 2022, the Napa metro area real estate market had more than a 4-month supply of homes for sale. By contrast, the other eight counties making up the Bay Area region all had about a 3-month supply or less.
This is good news for those who are planning to buy a home in Napa during 2023. While the supply crunch continues to drag on in other parts of California, the Napa Valley real estate market is in pretty good shape.
Higher Loan Limits for Napa in 2023
Here’s more good news for Napa, California home buyers…
Earlier this week, federal housing officials raised the conforming loan limits for Napa County and the rest of California. This means borrowers have a higher level of mortgage financing to work with, without having to use a jumbo mortgage loan.
In 2023, the conforming loan limit for Napa County will go up to $1,017,750. That’s for a single-family home purchase. There are higher limits for multifamily properties such as duplexes and triplex units.
Napa home buyers who need to borrow more than the conforming loan limit can do so by using a jumbo mortgage product. As long as you have good credit and sufficient income for that level of debt, you could qualify for mortgage financing well above $1 million. Jumbo loans are fairly common in the Napa area, due to relatively high home prices.
Disclaimer: This article offers predictions for the Napa, California real estate market in 2023, based on an analysis of current conditions. Such predictions are the equivalent of an educated guess and should be treated as such.