In a recent firsttuesday poll, readers were asked: What direction do you believe home prices will take by end of the year 2022?
210 readers responded, and:
- 52% said prices will drop below the month’s prior pricing;
- 40% said home prices will flatten out monthly; and
- 8% said home prices will continue to rise month after month.
Readers’ opinions have changed quickly, as firsttuesday published a similar poll just six months earlier in February 2022. The 81 respondents for the February 2022 poll had a different outlook, as:
- 16% said home prices will drop;
- 47% said home prices will flatten out; and
- 37% said home prices will rise.
Housing market attitudes have changed quickly in the course of just a few months, led by skyrocketing mortgage interest rates and an increasingly unstable economy.
Related article:
California home prices are at a tipping point
After two years of unsustainable price increases fed by historically low interest rates, California home prices have nearly leveled off, barely increasing on a month-to-month basis as of May 2022.
While home sales volume has already fallen below seasonal expectations, pricing tends to be sticky, often outlasting other market factors. However, economics are quickly catching up with home prices, which are expected to decrease in the second half of 2022.
California’s housing market is facing down the second act to the 2020 recession. As of Q2 2022, we are in an undeclared recession following two quarters of declining gross domestic product (GDP). Unlike the 2020 recession, which coincided with a global pandemic, this time around, government interference — stimulus and artificially low interest rates — will be limited. Further, while home prices jumped like a rocket during 2020-2021, they will fall like a feather, tapering off until finding a bottom, likely around 2025.
To stay up to date with home prices, follow firsttuesday’s tiered home pricing chart.
