The last 18 months in real estate have seen unprecedented fluctuations, and there are different takes as to what is going to happen in the housing market in 2022. In this article, we’re going to discuss what the experts are saying you can expect for the next year in the San Clemente real estate market.
Look out for a value appreciation plateau
The average single family home price in San Clemente is up 20-30% compared to 18 months ago, and many experts expect this to level out, but we still have an extremely hot market that shows no signs of slowing down at this point.
To give an idea, the median price of a single family home in San Clemente was $1.15 million in 2020, and jumped to $1.63 million in 2021, and inventory was literally cut in half from one year to the next.
Since there is such little inventory, the existing offers are still seeing massive pressure from buyers, and bidding wars are to be expected on pretty much every sale.
How much longer will this last?
The Federal Reserve has stated that it plans to increase interest rates in order to restrain continued home value appreciation, which will reduce affordability for buyers and give them less spending power.
“The Fed’s announcement that it will ‘soon be appropriate’ to raise interest rates is a clear sign that a March rate hike is coming,” noted Michael Pearce, senior U.S. economist at Capital Economics.
To what extent home value appreciation will level out is contingent on just how high interest rates will go.
The bottom line is that this famed plateau is entirely dependent on changes in interest rates and the supply of available homes on the market.
Who will be buying homes in San Clemente this year?
The last 18 months have redefined what home means to a lot of people, and many buyers are considering destinations that offer an exceptional quality of life. San Clemente certainly fits the bill, and we can expect this trend to continue, especially among the following demographics:
There are plenty of current residents interested in buying new property in San Clemente. Many are cashing out on their equity and looking to upgrade into the home of their dreams (which is oftentimes closer to the beach).
Out of area buyers
In particular, there have been plenty of new San Clemente real estate buyers from San Francisco, Los Angeles, and The Inland Empire.
Out of state buyers
We’ve seen out of state buyers from all over the country. Although many factors are at play, the increase in remote work is especially pertinent. Since many high earners can work from anywhere nowadays, San Clemente certainly is attractive for the growing remote workforce.
Since stocks are especially volatile, investors are now shifting their focus towards real estate, which is attractive thanks to its tangible and more predictable nature.
Recently passed Senate bills intended to ease the housing shortage
Housing laws passed in 2021 that are taking effect in 2022 include SB 9, SB 10, and Assembly Bill (AB) 1584, which offer new opportunities for builders and investors. These also may impact the supply and subsequent value of homes in San Clemente.
SB 9 makes two important changes to state law:
- It allows homeowners in most areas around the state to divide their property into two lots, thereby increasing opportunities for homeownership in their neighborhood.
- It allows two homes to be built on each of those lots, with the effect of legalizing fourplexes in areas that previously only allowed one home.
Senate Bill 10 provides that local agencies may adopt an ordinance to allow up to 10 dwelling units on any parcel, at a height specified in the ordinance, if the parcel is within a transit-rich area or urban infill site. It provides some increased ability for pro-housing cities to move forward potentially substantial upzonings without being held up by CEQA processing delays and litigation.
Assembly Bill 1584 is related to ADU’s (Accessory Dwelling Units), or additions to the back of single family resident lots. This new law makes any covenant or restriction that effectively prohibits the construction or use of ADUs void and unenforceable.
What these market indicators mean for buyers and sellers
If you’ve been waiting for the right time to list your home, now is the right time to leverage your equity and cash out. It’s also more important than ever to have a strategy in place for selling your current home and buying a new one. This is where a real estate experts like the ones at The Ulnick Group come in.
To get started, with the selling process click HERE for a free home valuation. You can also give us a call at 949.370.7140, or fill out the contact form HERE. We’d love to chat and figure out what your home is worth and whether selling is the right move for you!
It’s important to start your home search early and with experts by your side. Patience is key, as well as the understanding that the first house you like may not be the one you get. It’s also possible that you will get into bidding wars or experience a multiple counteroffer situation. This is where the experts come in. The right real estate agent will be able to guide you through these situations and take away at least some of the stress that comes with buying a home.
Some buyers currently say they’re waiting to buy because they expect the market to crash and prices to come down. However, that’s not necessarily the case.
If you’re a potential home buyer, it’s easy to get discouraged by the current lack of supply in San Clemente, but there are strategies you can leverage to make the most out of the current market conditions. We’d be happy to help you get a leg up on the competition.
Give us a call at 949.370.7140 so we can set up an appointment for you with a lender and start talking budget. We can also set up a personalized home search for you so you can be the first to know when new listings hit the market.
If you’d like to know about the statistics in your neighborhood or you’re curious about the value of your home in San Clemente CA or surrounding areas, let us know. We’d be happy to help.