As the historically low interest rates we’ve seen over the last couple of years finally begin to rise, it’s expected that an increase in mortgage lending rates is soon to follow. This impacts both buyers and sellers as buyers will have to increase their budget to accommodate the increase while sellers will have less bids due to the higher mortgage rates.
While this will have a different impact based on the specific market you’re shopping in, many are anticipating a drop in demand which could lead to more affordable housing costs. One of the Potempa Team’s hottest markets is California as it contains some of the most unique submarkets throughout the state. Today we’ll go over some of California’s largest housing markets based on their respective cities.
2022 Housing Market for Los Angeles
The Los Angeles housing market has never been out of fashion and the last year showcases this with sharp increases in prices along with record fast closings to snatch up property as soon as it hits the market. Homes in Los Angeles tend to stay on the market for around 35 days as of February 2022 compared to San Diego homes only taking an average of one week before a bid is accepted.
As for the median sale price in Los Angeles, prices are still up over 11% year-over-year. February 2022 saw the median price rise to $945,000 compared to 2021’s $850,000. This is a combination of a smaller inventory and fewer listings hitting the market. The cooling of the Los Angeles housing market is expected to start later this year, but there are plenty of other California cities to explore.
2022 Housing Market for San Diego
San Diego has beat out the Los Angeles market in terms of how hot it became over the last year. Even with a lower median sale price of $825,000 as of February 2022, San Diego was hit with a surge of buyers that reduced the city’s available inventory by over 45%. This left San Diego with less than 700 available homes in February and an average of eight days spent on the market by each home.
For comparison, the San Diego housing market in February 2021 had homes spend nearly twice as long on the market at 15 days on average. While this is still incredibly short, it showcases just how hot the San Diego housing market is and how even a potential cooldown will leave buyers in bidding wars due to low inventory.
2022 Housing Market for San Jose
The housing market in San Jose is one of the highest priced markets in all of America and saw significant growth over the last year, beating out both San Diego and Los Angeles in terms of median sale price increase. With a 29% increase year-over-year, San Jose saw a median sale price of $1,375,000 in February of 2022 compared to $1,067,000 in 2021.
San Jose’s supply of available homes has fallen over 55% since February 2021, a dip greater than the previous two California cities. With less than 350 homes, San Jose’s inventory is only half that of San Diego’s but with no decrease in demand.
If you’re looking to enter the California housing market, it’s important to have an experienced mortgage team on your side. The Potempa Team is here to help you navigate high dollar mortgages to save you as much as possible on your next home purchase. Reach out today to get started with any of our seasoned lending experts.