Expect 2022 to be another good year for real estate, 2021 C.A.R. President tells Silicon Valley Realtors

2021 C.A.R. President Dave Walsh last week shared his analysis of recent housing market data from the start of the new year, along with his expectations for 2022 at the first Silicon Valley Association of Realtors Los Gatos-saratoga district meeting of the new year. Walsh, who is vice president and manager of Compass in San Jose and has 42 years of experience in real estate under his belt, joins many real estate experts who say 2022 will be another good year for real estate.

Walsh said 2021 was an exceptional year. He indicated Santa Clara County has averaged 15,301 closed sales a year since 2009. Last year, the county closed

the year with 18,618 closed sales, up 34.8 percent from 13,815 sales in 2020, the

year the pandemic hit. Walsh expects the momentum in the market will continue as long as there are houses to sell.

According to Walsh’s data, the start of the year shows lower inventory in the county compared to the previous 30 days and the same period last year. Tracking data between December 27, 2021 and January 9, 2022, Walsh indicated the market hit the lowest point in active listings and pending sales compared to last year, with only 502 active listings and 746 pending sales in Santa Clara County. Compared to the same time last year, active listings were down 47 percent and pendings were down 24 percent.

“We just don’t have a lot to sell. There are multiple offers galore and there is so much competition out there,” said Walsh.

Despite low inventory, Walsh remains optimistic. Comparing the percentage of listings under contract to last year, he pointed out that Realtors are still selling 60 percent of the inventory.

One noticeable trend in the data is the demand for condominiums and townhomes appears especially high. Walsh surmised this could be because there are so few singlefamily homes available for sale, so it is likely that people are transitioning to planned unit developments instead. This trend could open up opportunities to sell in this sector of the market, said Walsh.

Walsh said he expects more homes will trickle into the market later

in the month and into

February. He predicts the market will see between 575 to 600 properties for sale by then.

“My projection is that we’re going to have a tremendous year. It’s not going to be better than 2021, but it will still be a phenomenal business year,” said Walsh.

Walsh shared expert predictions about price appreciation in 2022 which range from a 2.8 percent year-over-year increase by Corelogic to as high as 16 percent predicted by Goldman Sachs. Only Mortgage Bankers Association predicts a drop of 2.5 percent in median price.

Walsh said he is certainly not projecting a recession in prices in Silicon Valley; if ever, they will likely plateau in 2023. “We have a

whole different dynamic

in Silicon Valley,” he said.

Economic challenges persist. Covid continues to hamper the marketplace, but instead of a pandemic it will be endemic and something we will have to live with, said Walsh. The tight labor market continues to hamper economic recovery, not just locally, but nationwide. Inflation has hit 7 percent and to control it, the Feds have announced they would likely increase interest rates three times this year.

Walsh advised Realtors to stay engaged, attend meetings, and know the data. “This is not going to last forever. We’re professionals with the real information, the real data,” said Walsh. “The only thing that’s going to set 2022 back is because there are no

available homes to sell.”