The median cost of homes for sale in San Francisco has reduced in recent times. Does this trend imply a possible housing crash? Arigna Homes found out that the current median prices for houses for sale is higher compared to the same time in 2021. This factor outlines the reason why we are not headed for a housing crash in 2022. According to Redfin, a real estate analyst organization, the median house price in San Francisco is $1.488 million. The firm added that home prices increased by 10% from last year at this point of the year. Do you want to know more about why we are not headed for a housing crash? If yes, don’t worry – You’re about to discover why. Read more to find out our reasons.
Disclaimer: The housing prices forecast provided in this article are informed estimates. Please don’t make any financial or real estate decisions based solely on this content.
Reasons Why We Are Not Headed for a Housing Crash.
Recovery from COVID-19
The COVID-19 pandemic brought significant uncertainties in many sectors, including the real estate industry. It led to people losing their jobs courtesy of the restrictions imposed to curb the spread of this deadly pandemic. However, people adapted to the new normal. On the other hand, companies incorporated strategies to help employees perform their tasks remotely.
More homeowners no longer need or are not desperate to sell the houses to sustain their lives. Since more people resumed their “usual” lifestyle and jobs, they can comfortably pay rent for their houses. As a result, they are under no pressure to sell their houses. The pandemic’s impact is present to date in various forms. For instance supply chain distractions and the inability to resume work. However, homeowners developed several survival tactics as the world continues to recover.
Low-Interest Rates on Mortgage
The low-interest rates imply that homeowners can take their time to repay the loans taken to build their houses. When the interest rates are high, homeowners face significant pressure to repay their mortgages. As a result, they end up selling their houses at a lower price, preventing potential repossession of the property.
However, with low-interest rates on mortgages, homeowners can maintain their houses for a long time before selling them. Therefore, as long as the interest rates are low, we are not headed to a housing crash.
Stable Political Climate
Politics have a significant influence on the real estate sector. However, we are not expecting significant changes in the political environment that can lead to a housing crash. It’s not an election year.
Also, there are many new constructions in progress. Once completed, these constructions will help balance house prices by giving home buyers an edge. Therefore, we do not expect a sudden dip in housing prices due to the unstable availability of homes for sale.
A Wrap-Up on Why We Are Not Headed for a Housing Crash
Arigna Home Team does not anticipate a housing crash in the coming days unless there’s a sudden big macro-economic, international or national event like war. We believe that prices for houses will stabilize as the world continues to fully recover from COVID-19 effects.
Do you need professional help on selling or purchasing real estate? If yes, contact Arigna Homes as they have been in the industry for 15 years.