Market Update: A Year in Review
As we look back on 2021, it’s obvious that this has been a great year for real estate here in Contra Costa County and the Walnut Creek area. We’ve seen so many changes in the market’s operation and performance over the past few years and as some old trends begin to normalize, we are looking at the horizon as new trends appear. Let’s run through some of the activity that has made 2021 such an exciting period to be a homeowner, then look ahead to 2022:
In 2021, Contra Costa County’s market saw impressive growth in many respects; in terms of sale price, there was not a month this year where our market did not outperform the previous year. According to Realtor.com, January through March showed promising signs of growth in the range of a 19-23 percent increase on median sale price, but the real climb began in April of 2021, boasting a median sale price increase of 29.8 percent. With the year-over-year increase getting this high in only the fourth month of the year, many Realtors and agents in our area had fingers crossed that the climb would continue. And it did! May blew us out of the water by setting an area record for median sales price at the time—at $866,500, we saw a 35.4 percent increase over last May. June 2021 continued the surge in sale price, boasting a 23.7 percent increase over last year. Similarly favorable figures carried us all the way through the summer; July and August saw a continued trend of great home prices and high frequency of sales. As we look again at where the figures sat in November/December of 2021, the fact that we saw overall market growth during months that normally see a more severe drop in sales activity—is more than impressive. It’s a sign of good fortune for the New Year.
As we can see, 2021 was a great year for homeowners to sell—and though we have entered a new year, we are bringing 2021’s market with us into 2022. What does that mean for the Walnut Creek area?
California Association of Realtors (CAR) offers us an interesting perspective on 2022’s real estate market on their “2022 California Housing Market Forecast.” To begin, the forecast predicts fair weather on the employment front; we can look forward to the report’s predicted job growth of 5.2% and non-farm job growth of 4.6%, for 2022. In addition to low mortgage rates, these predictions look great for homeowners in the new year.
Even when we look back on the end of 2021, California’s October performance showed that mortgage rates were headed in a favorable direction. Rates for 30-year, fixed-mortgages averaged 3.07 percent in October, up from 2.85 last October. And the five-year, adjustable mortgage rate average 2.54% in October compared to 2.89% twelve months ago. The progression we’ve seen in November and December have done nothing to dash our positive outlook on mortgage rates for the new year.
In addition to these forecasts, the report’s predictions leaned toward a decreased rate of sales and a rise in sale prices next year. CAR said in their release: “The baseline scenario of C.A.R.’s ‘2022 California Housing Market Forecast’ sees a decline in existing single-family home sales of 5.2 percent next year to reach 416,800 units, down from the projected 2021 sales figure of 439,800. The California median home price is forecast to rise 5.2 percent to $834,400 in 2022, following a projected 20.3 percent increase to $793,100 in 2021 from $659,400 in 2020.”
The fact that we are still seeing market growth, but at a pace that continues to grow more relaxed, is a very good sign. When prices and activity skyrocketed during the early days of the pandemic, many professionals feared that inflation and rising home prices would kill the market from within. As we see continual growth at a consistently-normalizing rate, we are entering a market that thrives healthily and without fear of setback. This is great news for anyone looking to sell a home in the Walnut Creek area.
If you’d like the advice and assistance of a real estate professional with a finger on the pulse of our ever-changing market, give me a call at 925-956-8837.