What is the 2022 Real Estate Market going to be like here in Alamo California and the East Bay? 

According to the latest forecast put out by Fannie Mae,
median home prices are expected to rise 7.9% between the fourth quarter of 2021
and the fourth quarter of 2022. While that would mark a slowing from the
exponential price growth we saw in 2021, it would still represent strong growth
historically. (On average, U.S. home prices have climbed 4.1% on an annual
basis since 1987.) So, put another way: The housing market, according to Fannie
Mae, is set to return to a relatively normal level of price appreciation.

Fannie Mae also expects mortgage rates to climb next
year, with the average 30-year fixed-rate rising from 3.1% to 3.4%. Though the
downward pressure on prices from rising rates, the government-sponsored
enterprise says, won’t be enough to pull prices down.

“Mortgage rates may rise in response to the tighter
environment, but we expect the severe shortage of homes for sale to remain the primary driver
of strong house price appreciation through at least 2022, limiting interest
rate effects on home sales and home prices,” wrote Doug Duncan, chief economist
at Fannie Mae, in its latest 2022 outlook.

As far as 2022 outlooks go, Fannie Mae’s forecast is right in the middle
of the spectrum. On the bullish end are Zillow and Goldman Sachs. In the coming
12 months, Zillow foresees U.S. home prices jumping 13.6%. Meanwhile, Goldman
Sachs expects home prices to swing up a staggering 16% by the end of 2022. But
not everyone sees the frenzy continuing: CoreLogic, a real estate data firm, is
far more bearish—forecasting just 2.2% home price growth over the coming 12
months.

Of course, all of these forecasts should be taken with a
grain of salt. After all, at the beginning of the pandemic—when some states had
banned in-person real estate showings, CoreLogic forecast prices would fall 1.3%
between April 2020 and April 2021. For that same 12-month period, Zillow
predicted home prices would fall between 2% to 3%. Not only did the housing
market not slide backward, it went on one of the biggest runs in U.S. history.

For more information on the current Real Estate Market in
Alamo California as well as Danville, San Ramon and surrounding cities here in
the East Bay, Contact Andrea Scott.