As we head further into the spring homebuying season, earlier predictions for the 2022 real estate market still ring true. Fortune Magazine puts it plainly, “We're in the middle of the housing market's hottest stretch in the nation's history.” This remains a strong seller’s market with low inventory and high buyer demand, but it won’t be as crazy as the peak in 2021. 

As a buyer, you can expect fewer bidding wars, but you should come as prepared as possible by knowing what you can afford and having your pre-approval letter on hand. Home prices are expected to continue to rise, but at a slower pace, so sellers should get ahead in preparation of selling their homes as labor and supply shortages are extending timelines of repair and renovation projects. 

HERE’S WHAT WE KNOW ABOUT RISING MORTGAGE RATES

Today’s mortgage rates are about 1% higher than they were this time one year ago, according to a recent Time.com Nextadvisor article. Experts say several economic factors are pushing interest rates up this year: The Bureau of Labor Statistics (BLS) reported recently that inflation climbed again in February and is the highest in four decades at 7.9% year-over-year. 

What this means for spring 2022 homebuyers is that a 1% difference in mortgage rates can affect your buying power. You can work around this by putting down a higher down payment if that is an option for you. Yet experts tend to agree not to time the rate market and buy when the time is right for you. From a historical perspective, 4%+ rates that we’re seeing now are considered favorable. Prior to 2011, rates below 5% were a rare thing. 

THE HOUSING FRENZY WILL PASS, BUT NOT THIS SPRING

If you’re one of those who waited year after year for the housing market to crash or the bubble to pop, you’re going to have to wait a bit longer for any significant change. Housing economists are clear that the frenzy will eventually end, claiming simple economics dictate that home price growth can't outpace income growth forever. In a recent Fortune.com article, home prices were stated to be growing six times faster than wages. All of this is to say: the housing market will eventually cool, but not during this spring season. “But what about next year?” You ask. Real estate forecasts show that the combination of our nation’s inventory problem, sky-high home prices and rising mortgage rates will bring the market back to “normal.

THE SACRAMENTO REAL ESTATE MARKET

Data, stats, and trends are only as good as they are specific. So while nationwide trends reflect how the local market will do, it’s still a good idea to pay attention to what’s going on in our real estate market. Here’s a rundown:

SACRAMENTO REAL ESTATE MARKET 2022 OVERVIEW

• Median Home Value: $475,136

• Median List Price: $624,667 (+5.1% year over year)

• 1-Year Appreciation Rate: 20.9%

• Median Home Value (1-Year Forecast): 15.8%

• Weeks Of Supply: 4.5 (-0.3 year over year)

• New Listings: 381 (-19.9% year over year)

• Active Listings: 1,960 (-20.3% year over year)

• Homes Sold: 490.0 (-5.2% year over year)

• Median Days On Market: 12.3 (0.0 year over year)

• Median Rent: $2,228 (+12.5% year over year)

• Price-To-Rent Ratio: 17.77

• Unemployment Rate: 4.4% (latest estimate by the Bureau Of Labor Statistics)

• Population: 1,552,058 (latest estimate by the U.S. Census Bureau)



• Median Household Income: $67,151 (latest estimate by the U.S. Census Bureau)

WHAT DOES THIS MEAN FOR YOU? 

One of Sacramento’s housing market’s greatest features is its proximity to San Jose and San Francisco. As the more affordable alternative, Sacramento has seen an increase in buyers and will continue to see more of an influx of both buyers and renters fleeing other cities. Since the pandemic has cut into the local inventory supply, prices are expected to rise for the foreseeable future. 

If you’ve been wavering between “buy now or buy later,” we urge you not to wait until it’s too late. Mortgage rates are expected to rise along with home prices this year. Could you possibly position yourself advantageously? Absolutely! Get in touch with us and we can walk you through the options and help you weigh the pros and cons. Sellers! Now is the time to sell if you’ve been thinking about it. What will it take to get your home on the market? Let’s talk. Schedule a consultation with our team.