2022 Real Estate Market Forecast for California Part 2
When predicting what will happen in the future, you need to look at what is happening overall in the world. We are seeing more jobs come in, people are spending money like crazy and life events that have been held off like moving, getting married and having babies are forecasted to increase. How is housing going to fare? 2.7 million people lost their jobs back in 2020 at the peak of the pandemic and as of recently there still are over a million people who have lost their jobs or who have not gotten their jobs back.
Keeping this into perspective there are about 40 million people in California. How is California recovering so fast and seeing such appreciation? Looking at the graph the stats that are in red are one of the lowest paying professions, you see the leisure and hospitality were hit the hardest at just under 1 million, followed by retail trade, other services and admin support. But in green are higher income earners, and there are a lot less jobs that were lost that were higher income earners, most of the lower paid jobs were not in a position to buy a home anyways. Also, interest rates come into play when predicting whether prices will go up or down. Rates are historically low. Averaging from 2.65% to 3.08% at the end of October. Historically, we are at one of the lowest interest rates of all time. Even if rates go up, they will still be relatively low. We have the 5th lowest level of homeowner vacancy rates in the Nation. The 3rd lowest rental vacancy rate in the nation. All time low levels of housing inventory in December.
An $830,000 record-setting median price in August. 2nd worst state for overcrowded housing. 2nd worst state for percent of rent-burdened households. 2nd worse state for overcrowded housing. Dead last for supplemental poverty estimates. So the housing market forecast for 2022 according to the California Association of Realtors looks good.
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