The year 2021 was an amazing year for Orange County real estate. Despite the coronavirus pandemic and government-related restrictions, home prices and demand in the region skyrocketed, primarily because of low inventory and historically low-interest rates.
Now, the question is, will this positive trend continue in 2022? How much will Coastal Orange County homes in the area cost on average? Before we take a look into what the housing market has in store for homebuyers in 2022, let us first have a quick review of the year that was.
Orange County’s Hot Housing Market as of December 2021
- Orange County, CA was a seller’s market in December 2021, which means that there were more people looking to buy than there are homes available.
- As 2021 ended, the median listing home price in Orange County, CA was $925K, up by 10.1% year-over-year.
- The median listing home price per square foot in Orange County, CA was $539.
- The median home sold price in Orange County, CA was $935K.
- On average, homes in Orange County, CA sell after 50 days on the market.
A Review of the Housing Market in Some of the Coastal Orange County Neighborhoods as of December 2021
- The median listing home price in Irvine, CA was $1.2M, up by 28.4% year-over-year.
- The median listing home price per square foot Irvine, CA was $607.
- The median home sold price Irvine, CA was $1.2M.
- The median listing home price in Newport Beach, CA was $3.7M, up by 31.2% year-over-year.
- The median listing home price per square foot in Newport Beach, CA was $1.3K.
- The median home sold price in Newport Beach, CA was $3.2M.
- The median listing home price in Laguna Beach, CA was $3.4M, up by 19% year-over-year.
- The median listing home price per square foot in Laguna Beach, CA was $1.4K.
- The median home sold price in Laguna Beach, CA was $3.8M.
General Overview of the Coastal Orange County Housing Market Forecast for 2022
- Home values in Coastal Orange County are predicted to keep increasing in 2022.
- As the housing market settles, the Orange County real estate market is forecasted to increase by 12.5% compared to the previous year.
- The days on market may average more than 32 days.
- There will be more listings, which means less pressure for buyers as there will be more options on the market.
- There will be less competition on the market, so buyers will have more time to make decisions and bid on homes instead of feeling pressured to outbid other buyers and potentially go over their budget.
- Price increases will level out, making homes more affordable for buyers.
- Price increases for homes in Orange County are predicted to happen at a much slower pace than 2021.
Market Behavior: Coastal Orange County Home Buyers in 2022
- In 2021, many homebuyers were willing to pay more than the property’s appraised value because of the low inventory.
- As a borrower’s mortgage is dependent on the appraised value of the property, many buyers decided to waive the appraisal contingency and pay the difference between the sales price and appraised value in cash.
- However, as the Orange County 2022 real estate forecast predicts that demand will slow down this year, buyers will no longer need to pay more than the home’s appraised value.
- This is good news for borrowers, as paying more for a house than its actual value is not good practice.
- Most home buyers are purchasing primary residences instead of second homes to use as investment homes or vacation homes.
- Although the construction of new homes has also slowed significantly during the pandemic, putting more pressure on the Orange County housing market in the past year, it is predicted that new construction will pick up again this 2022.
- As more homes become available, home price increases are expected to slow down.
What Home Buyers Can Expect When Purchasing a Home in Orange County in 2022
- 2022 is a good year to buy a home in Orange County, as inventory will be higher and there will be greater price flexibility.
- Unlike in 2021, fewer home buyers will be priced out, including millennials who are ready to buy a home but have not been able to jump on board because of the stiff competition.
- Loan limits will increase in 2022, making it easier to buy a home with a smaller down payment.
- The Orange County conventional loan limit in 2021 was $822,375; in 2022, this is raised to $970,800.
- While mortgage rates are predicted to increase in 2022, these will still be lower than the pre-pandemic rates.
- Homebuyers will have a more relaxed experience in 2022, as well as a greater chance at loan approval with higher loan limits.
- Buyers will no longer have to shell out a large amount in terms of cash out of pocket outside of the typical down payment and closing costs with lower prices.
Should You Buy a Home in Orange County This 2022?
- Buying a home in 2022 can be a great investment, especially with things settling down.
- Despite the fact that 2022 will continue to see price increases, low-interest rates, and high demand for real estate in Orange County, these will not be at the same level as 2021.
- Lenders will continue to be flexible with their underwriting guidelines and most borrowers will have several options for loans including conventional, FHA, and VA loans.
- As there’s no need for jumbo financing with higher loan limits in Orange County, it will be easier and more affordable to get financing for your home purchase.
- Although sellers will still be selling their homes fast, there won’t be inflated and unrealistic prices like the ones in mid-2021.
If you are considering buying a home in the Coastal Orange County area, I can show you all your best options given your lifestyle, preferences, and budget. Feel free to contact me by phone at (949) 326-3392 or send me an email at email@example.com if you have any questions or if you want to schedule an appointment.