Real Estate Market Crash 2022: The Southern California Market

The Fed has just raised interest rates by 3/4 of a percent making it that much more expensive for your monthly payments when you buy a home. The stock market is falling and the real estate market is slowing down. Does that mean we're headed for a crash in 2022? 

My name is Matthew Silva. I'm a real estate broker and I've been selling homes for almost 20 years now in the Southern California area and I want to share with you the truth behind all these rumors that you're going to be seeing on the internet. And now you know the difference between fact and fiction when it comes time to buying and selling homes in Southern California. 

Let's start off with the good news. 

If you're looking to buy a home in Southern California, you're going to have more opportunities to purchase a place. You're not going to have to bid a hundred thousand dollars over the appraised value. You might even be able to negotiate the price down a little bit. 

Now, for the bad news. 

In Southern California, there's such a high demand for properties that we’re really not going to see too much of a discount on the prices. We're not going to be seeing too many foreclosures. So if you're hoping to get bargain bottom prices and, you know, fire sale, sorry to disappoint – that's just not going to happen. And the reason why is because Southern California is just a different market. 

A lot of people will look at the news and will say, “Oh my gosh, prices are falling, there's going to be some great deals out there”. But in Southern California, we have so much demand for housing that they're tearing down Town malls, and they're tearing down bowling alleys just to build more condos and apartments. 

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Now, in the rural areas, this is going to be true because there's always more land to build and the new home builders may be dropping their prices because if you want a new house, you can just go up the road and build something new. But here in Southern California, it's already over built with so much demand. 

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So here are some facts to consider.

If you were looking to rent in a Southern California area and I'm referring to the more popular areas, you're going to find that the rents are pretty high. 

There are about 3,500 dollars a month for your average three bedroom, 2 bath homes, some go up to 4,500 a month. So even then there's still a lack of homes for people to rent for every property for rent. You still have 20 to 30 renters, who are interested in renting that one property.  With rents being so high, it's going to be hard enough to rent let alone buy in Southern California. 

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Well, the other factor that you need to keep in mind is just the amount of inventory of homes for sale that you can purchase. Currently, we only have a two-month supply which is not very many homes to choose from, and that means we're in a seller's market. In a seller's market, the sellers hold all the cards, and they don't have to sell it if they don't want to. 

Now, if we do start seeing more homes, come on the market, which is I am hoping that means we're going to be more of a balanced real estate market when we have three to four months worth of inventory, of homes to choose from now, if everything does flip, we'd have to see three times more homes hit the market. And that would mean we'd have a six-month supply and now it's a buyers market and you can handle every single home you see. I don't see that happening anytime soon just because the demand is so high. 

So if you're looking to buy a home in the Southern California area, you're going to want to know about our system that's proven to save you money on your next home purchase. But if you're looking to get a bottom of the barrel price and hoping that there's going to be a major real estate crash and the prices are going to go down by 50% – I'm sorry to say, you're going to be very disappointed.

There just isn't enough homes to go around to make a difference in the market that you would like to see. If you'd like to sit down and talk some more about how we can help you purchase a great home or to live in or investment property in the Southern California area.

 I'd love to talk with you a little bit more about what we do and how we can help you. Please call 562-521-8575 to set up an appointment today.

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