Farewell 2022! It has been a good year with so many positives. I extend a warm thank you to all my clients, my broker, and everyone I work with. My success is a direct result of your trust in me. In this New Year, I would like to be the realtor you turn to for all your needs. Even if it is to ask questions regarding your neighborhood sales or property taxes, I will be happy to assist you. I am lucky to be able to do what I love doing everyday. I wish the same for each and every of you. May we all have the BEST 2023 ever.
Preeti
Active Inventory 2022 – After starting the year with record low number of available homes to purchase, the
inventory went higher but is still far below pre-pandemic levels.
- The year started off with an active inventory of 954 homes, the lowest since tracking began in 2004
- Demand slowed substantially – Starting at 2022 at 3.25%, rates surpassed 5% in May and eclipsed 6% in June
- Inventory rapidly grew from mid-April until it peaked at the beginning of August at 4,069 homes.
From August through year’s end, the number of available homes decreased to 2,642
- Rates eclipsed 7% in October taking a bite out of demand
- During the holidays rates dropped into the lower 6’s
- The inventory is poised to drop below 2,500 upon ringing in a New Year, with not enough available homes to
purchase.
Demand 2022 – After two years of heightened demand, it made an about face and fell to its lowest levels since the Great Recession.
- At the beginning of the year, demand for OC homes was muted
- There were not enough homes on the market compared to the sea of buyers looking to purchase
- That shifted as the year progressed and mortgage rates spiked, impacting affordability
- Demand did not climb much. In the last two weeks of December, demand dropped by 95 pending sales
FORECAST 2023
After two years, the Federal Reserve stepped in to reverse inflation and utilized the housing market as one of the main economic engines to achieve its objective.
- They increased the Federal Funds Rate to 4.5% in December, its fastest rise in more than 40 years
- Long-term mortgage rates rose from 3.25% at the start of 2022 to over 7.25% in October.
- They eased below 6.5% in December as inflation numbers began to improve
Inflation remains elevated, up 7.1% year over year through November. Core inflation, less the volatility of food and energy, is currently at 5.96%. The Federal Reserve’s core inflation goal is 2%. The overall US economy has remained resilient backed by a strong labor market, sky-high job openings, low unemployment, and increasing consumer spending. Yet, the high-interest rate environment has been rocking the financial markets. The unrelenting Federal Reserve policies will eventually instigate an economic recession in 2023 that will most likely begin by mid-year.