Are you planning to buy a home in or around Napa, California in 2023? Wondering…
The real estate market in San Jose, California has been highly competitive throughout 2021. Looking forward, housing market forecasts for San Jose and the broader Bay Area predict that home prices will continue to climb into 2022.
At the same time, we might see a bit of a cooling trend in terms of home sales activity. The general consensus among housing analysts and economists is that prices will rise more slowly in 2022 than they did over the past year.
San Jose Housing Market Outlook for 2022
So, what’s the general outlook and forecast for the San Jose real estate market in 2022?
It’s hard to make predictions for this housing market, because it’s often defined by extremes. (Low inventory, high prices, lightning-fast sales, etc.)
Additionally, the San Jose real estate market doesn’t always follow the broader regional trends. There have been times when prices were rising across the Bay Area but declining in San Jose — and vice versa. It’s truly a unique housing market, partly due to the heavy tech footprint in the area.
The general forecast for the San Jose real estate market in 2022 suggests it will remain highly competitive, in terms of home-buying activity. But price growth could slow down a bit over the coming months.
In October, Zillow made the following prediction for this market:
San Jose-Sunnyvale-Santa Clara Metro home values have gone up 17.6% over the past year and Zillow predicts they will rise 5.9% in the next year.
If we had to make our own best guess, based on current conditions, it would be this. The San Jose real estate market forecast for 2022 will likely include smaller home-price gains than those seen over the past year. That double-digit appreciation can’t go on forever. Even so, competition among home buyers will remain high due to tight inventory conditions across the region.
A Tight Real Estate Market With Low Inventory
The real estate market in san Jose, California is highly constrain to do to record low inventory levels. This trend has affected everything from Home prices to sales activity, In addition to making things challenging for buyers.
According to recent data, Santa Clara county had about a 0.5 months supply of homes for sale as of September 2021. That is miles below what is considered to be a balanced market. It’s also well below the national average.
Take inventory conditions will affect the housing market forecast and I’ll look for San Jose stretching into 2022. In fact, this is arguably the biggest factor that is currently affecting on prices and overall housing trends in the area.
San Jose has a history of a price fluctuation over the past few years. Price is Rose sharply during the early 2010’s, but took a downturn during 2018 and 2019. But the inventory situation is different this time around. The severe and I’m going shortage of housing market supply could keep on prices claiming welland 2022.
Is a Cooling Trend on the Horizon?
As we mentioned in a previous blog post, the California Association of Realtors recently predicted a decline in home sales during 2022. More recently, in mid-October, the industry group published a report that suggests the San Jose real estate scene might be experiencing the start of a cooling trend.
According to their October report, existing single-family home sales declined by 3.1% from August to September 2021. Additionally, the median home price dropped by 1.5% month over month.
Is this a seasonal blip on the radar, or the start of a more sustained cooling trend? It’s too soon to tell. But it stands to reason that the San Jose real estate market might slow down a bit in 2022, following more than a year of overheated home-buying activity.
The bottom line is that the San Jose housing market will remain highly competitive in 2022, as buyers continue to compete for limited inventory. But we might see a bit of a slowdown in terms of home-price appreciation.
Disclaimer: this article contains forecast and predictions for the San Jose real estate market and the broader San Francisco Bay area. Housing predictions are the equivalent of an informed gas and should be treated as such. This information has been provided… we have provided we’ve gathered this information as a educational service to our readers.