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2022 Los Angeles Real Estate Market Predictions

2002 Market Predictions
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Happy New Year! Here we are in 2022 and Scott gives his top 3 predictions on what to expect for the Los Angeles real estate market.

First, inventory will still be scarce. In the Porter Ranch area, there are currently only 15 homes for sale of nearly 14,000 single family units in the entire 91326 zip code. In Granada Hills there is also a total of just 15 homes for sale in the whole 91344 zip code. That is under a half month’s supply. This has been exacerbated right now by COVID re-emerging and some of our sellers deciding to put off putting their home on the market. They are waiting to see what happens in the next 30 to 60 days. The inventory is tight and the opportunities for buyers to purchase is slim. This is great for sellers but slightly more difficult for buyers.

Second is the rising interest rates. In early 2021, the interest rate for a conforming loan was just 2.5%. That was all-time low. Currently in January of 2022, the rates are hovering around 3.5%-3.75%. We expect those interest rates to increase by the end of this year closer to 4%. Due to inflation, the Fed has already discussed increasing rates this year.

So what does that mean for both buyers and sellers? For buyers, there are several buyers that are currently trying to purchase a home before the interest rates start increasing even more. For sellers, this means that less buyers will be able to afford due to increasing interest rates. Still, with an overwhelming demand and lack of inventory, even with the rising rates, we expect demand to be pretty strong. Maybe instead of 20 offers on your home you only have a few.

“Low inventory, low interest rates and high demand mean prices of homes will not fall in 2022.”

Even though rates are still historically low, inventory is extremely scarce and overwhelming buyer demand are indicators that the prices will NOT drop. What can be expected according top most experts is that there will be 5 to 10% growth in 2022. The increase in interest rates will most likely prevent and slow down the rapid growth we saw in 2021.

Thinking About Selling Your House Right Now?

Also, if you’re thinking about selling, I just told you, there’s nothing for sale. You’re the only show in town. It’s a fantastic thing. It’s a seller’s market right now. This is an insane time to get your home on the market, into cash out and sell out a very, very high price. So, whether you’re looking to move up into a new, bigger home, or you’re lookin’ to relocate, get out of state where you can get a little more for your money, you are going to get a premium for your home.

So, hopefully this is beneficial for you. If you are thinkin’ about buying or selling your home here in Los Angeles, give us a call 818-396-3311. Thanks for watching.

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