2021 was an absolutely phenomenal year for real estate and home values. We saw double digit percentage growth in most neighborhoods. Interest rates have been at all time lows which brought many buyers to the market. It was very common to see multiple offers on all listings as well and most listings went into escrow within 1 to 2 weeks, if not sooner. Going into 2022, we expect the strong seller’s market to continue. While inflation continues to be an issue and interest rates are rising, they are still under 4% which is fantastic news for buyers. Demand is predicted to remain high while inventory remains tight, so we are still seeing multiple offers. While we do not expect double digit increases in home values, it is expected that homes will continue to increase in value. It remains a fantastic time to sell your home and to take advantage of low interest rates.
Looking at the last half of 2021 compared with the same time in 2020, cities in the northern San Fernando Valley saw an increased median price increase from $775,000 (2020) to $895,000 (2021). That is a 15.5% increase in value and we also saw a 6% increase in the number of homes sold. Cities in the southern San Fernando Valley saw an increase of 11% in home value, $1,350,000 (2020) to $1,500,000 (2021). There was a 15% drop in the number of homes sold, which meant inventory was even tighter. If we continue to see fewer homes on the market that will only increase prices.
As the Fed has indicated several rate hikes are to be expected this year. They will also be buying fewer bonds on the market. These 2 actions will lead to higher interest rates for buyers so if you are thinking of purchasing, now is a great time.