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Even More Bay Area Housing Market Predictions for 2022

At a glance: Recent predictions for the San Francisco Bay Area housing market in 2022 suggest that home prices will continue to climb next year, but at a slower pace. Overall, the real estate scene will remain competitive due to limited inventory.

Back in April, we shared some thoughts on the current state of the Bay Area real estate market and what things might be like in 2022. More than six months have passed since we posted that article, so we figured it was time to revisit the subject using the latest data, tends and projections.

So, here are several more predictions for the Bay Area housing market in 2022.

Bay Area Housing Market Predictions for 2022

It has been a crazy year for the real estate market. This is true for the San Francisco Bay Area as well as the rest of the country. Despite the location, the headlines were generally the same. They spoke of tight inventory, strong competition among buyers, bidding wars, and fast-rising home prices.

Now here we are, approaching the last two months of 2021. Many home buyers are now looking ahead to 2022 and wondering what the Bay Area housing market might be like.

In a real estate context, 2022 will probably be a “diluted” version of 2021. Forecasts suggest that home prices will continue to rise across the region, but at a slower pace than the current year. Sales activity might slow down a bit as well, easing competition among buyers.

But the tight supply conditions that have fueled our market over the past 15 months or so remain in effect. Inventory shortages will follow us into 2022 and will continue to be a driving factor.

A More Moderate Home-Price Outlook

Let’s back up a moment and talk about home prices. What’s the prediction for the Bay Area housing market in 2022, as far as house values are concerned?

According to several forecasts, home prices across the U.S. are expected to rise more slowly in 2022 than what we’ve seen this year. The same goes for the Bay Area region.

For instance, in October of 2021, Zillow issued the following prediction:

San Francisco-Oakland-Hayward Metro home values have gone up 17.7% over the past year and Zillow predicts they will rise 8.6% in the next year.

Granted, they don’t have mystical powers of precognition. Their forecast is essentially an educated guess, based on current housing conditions and expectations for the near future. Still, it’s worth noting when a team of knowledgeable analysts and economists predict a slowdown in price growth over the coming months.

As of late October, the median price for the Bay Area real estate market was north of $1.3 million. That’s an all-time high.

Related: How to afford a house in our area

Low Inventory Will Continue to Challenge Buyers

Back in September,® announced that housing market inventory across the U.S. “hit a 2021 high in September, giving buyers more choices than they have had all year…”

But that was for the nation as a whole. In the San Francisco-Oakland-Hayward metropolitan area, property listings on were down by -19.3% year over year. Recently added listings also declined in September, according to their report.

So while the inventory crunch might be easing in some parts of the country, conditions are still pretty tight here in the Bay Area. Housing market predictions for 2022 suggest that this imbalance between supply and demand will continue to boost home prices for the foreseeable future.

According to the latest housing data, the San Francisco Bay Area had less than a 2-month supply of homes for sale as of September 2021. Those are the kinds of conditions that tend to favor sellers, while increasing competition among home buyers. It will take some time dig out of this inventory “hole.”

This is the arguably the number-one factor that will influence the Bay Area housing market in 2022. Predictions suggest that prices will keep climbing, and tight inventory conditions have a lot to do with that.

A rise in inventory, on the other hand, could cause quite a shift within the local real estate scene. If more homes come onto the market in 2022, it could cool the market and ease competition among buyers. But that remains to be seen.

For now, the San Francisco Bay Area housing market remains highly competitive with fast sales and rising prices.

Need Help With Your Mortgage Financing?

The key takeaway here is that it’s still a hot market, and probably will be in 2022 as well. As a home buyer, it’s important to have your financing arranged before you start house hunting. This allows you to move quickly when the right property comes along.

And that’s where we come in. Located in the Bay Area, Bridgepoint Funding offers a broad range of mortgage products. Our business model allows us to find the best financing option for each individual client, whether that involves an FHA, VA, conventional or jumbo loan.

Please contact us with any mortgage questions you have, or to start the pre-approval process.

Mike Trejo

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

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