Where's the Market Headed in 2022?

Here’s the latest update on the market and how conditions affect you.

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As 2021 came to a close and 2022 is upon us, many people have been asking me whether now is still a good time to buy and sell a home. Today I’ll share the latest statistics for Sacramento, Placer, and El Dorado Counties to help you understand what’s going on in the market and whether or not you should proceed with your transactions.

At 0:30 in the video above, you’ll see a chart that compares the number of homes for sale, homes that sold, and pending contracts between October 2020 and December 2021. As of December, there are currently 1047 homes for sale, which means that inventory has dropped considerably. There are 1561 which also declined from November pending transactions currently; that number has remained relatively consistent for most of the year. 1969 homes closed escrow in October.

At 1:18 in the video above, the chart shows how the average list-to-sale price ratio and days on market stayed consistent with November. Currently, homes are selling for an average of 100% of the list price and sell in an average of 23 days which is up from 20 days. We’re no longer seeing the crazy bidding wars where there were 30 competing offers on a property. Nowadays, it’s more like two or three offers on homes that are priced correctly. 

Next is a chart that shows the months of inventory based on closed sales. We’re currently at 0.5 months of inventory, or just under a half of a month worth. Remember that anything from zero to three months is a seller’s market. Four and five months is a neutral market, and anything above five months is a buyer’s market. As you can see, we’re clearly still in a seller’s market.

With interest rates at historic lows, now is a great time to buy a home. However, economists predict that interest rates will increase over the next two or three months. Remember, if your interest rate increases by 1%, you’ll lose 10% of your buying power. Because the holidays are coming up, many buyers think it’s better to sit tight, so I encourage you to take advantage of the reduced competition.

Now is also a good time to sell. With low interest rates and high buyer demand, sellers can capitalize on the peaking price and sell their homes quickly. If you need to move out of state, don’t worry! We just helped a family move from Lincoln to Tennessee; we were able to get them $10,000 over list price for their home, and we negotiated a 60-day free seller rent-back.

If you have any questions about the market or are thinking of buying or selling your home, don’t hesitate to give us a call or send an email. We’d love to hear from you. Happy New Year!