From tight inventory to bidding wars, home buyers in the San Fernando Valley have seen it all over the past two years when it comes to real estate. 2022 was a transitional year, where shifting buyer priorities upended norms in the San Fernando Valley real estate market. Home prices hit record highs as scores of first-time and experienced buyers battled over a dwindling supply of available listings.
But buyers can confidently begin their search in the new year, as several positive trends are affecting home buying in the San Fernando Valley this coming year in 2023. While buyer preferences for more space —inside and outside the home — remain and supply chain issues continue to stifle home construction efforts, other factors, such as the potential increase in interest rates, are expected to change the game in 2023. We do expect prices to dip next year based on current economic factors. To what extent prices fall next year remains unclear, as numerous market forces exert pressure on the prices. Inflation is at its highest point in decades, and a recession looks imminent if it’s not already here.
In October 2022, the SRAR report showed that homes in the San Fernando Valley have a median sale price of $840,000 compared year-over-year (YOY). There are 525 new listings, 1,015 active listings, and 353 pending listings.
San Fernando Valley Homes for Sale
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San Fernando Valley Real Estate Market Insights and Statistics
During the last 12 months, the real estate prices in the San Fernando Valley decreased by 2% to $840,000, according to the Southland Regional Association of Realtors. Our San Fernando Valley realtors expect the home values to fall over the next 12 months, and here’s why.
Credits: walletinvestor.com
After two tumultuous years in the California housing market, we expect the home price growth to reduce in 2023 — but that doesn’t mean that the San Fernando Valley homes for sale will be more affordable. Due to the rising interest rates, the typical monthly mortgage payment on a home purchased in 2021 could be more than $500 higher than in 2022. It’s safe to assume that as mortgage rates and home prices in the San Fernando Valley keep rising, potential buyers will continue to struggle.
We can attribute the declining market to the Federal Reserve’s attempts to tame inflation this year. One of the strategies that was utilized to get a handle on inflation is to raise interest rates. With the continuation of inflation rising to 9.1% — its highest point in 40 years, in June — the Federal Reserve began raising interest rates to dissuade consumers from spending more money.
While home prices are cooling off, fewer homes are entering the market since owners with low-interest loans are unwilling to get out of them.
Credits: walletinvestor.com
What is the housing market like in the San Fernando Valley today?
- In October 2022, San Fernando Valley home prices were down 2% compared to last year, selling for a median price of $840K.
- On average, homes in the San Fernando Valley sell after 38 days on the market compared to only 23 days last year.
- The median sales price of single-family homes was $930000
- The median sales price of condos was $630,000
- The sale-to-List Price Ratio was 100%, meaning that homes in the San Fernando Valley sold on average for approximately the asking price.
- San Fernando, CA is a seller's market in October 2022, which means that more people are looking to buy than homes are available
What Does the Future Look Like? - San Fernando Valley Housing Market Projections 2023
As sellers in the San Fernando Valley adjust their expectations, the well-priced homes are selling relatively quickly, spending an average of only 38 days on the market. And for the buyers: less competition, more homes for sale, and fewer homes selling above the asking price. This all points to a more favorable market environment which is good news for those who sat out during the past two years due to the fiercely competitive local housing market.
Since affordability will be the most significant factor in the 2023 housing market, we have noted that buyers have become more cautious in recent weeks, particularly since two-year fixed-rate mortgages moved above 6%. The market is still busy, but buyers are particularly eager to save money on their mortgage wherever possible.
Growing economic concerns and high inflation will shoot up the average for 30-year fixed mortgage interest rates to 6.6% in 2023, up from 5.2% in 2022 and 3.0% in 2021. They, however, remain relatively low by historical standards, and there’s still room for optimism on that front if the mortgage rates recede.
Here is the Active MLS Listings summary 2022-2023
Credit - http://www.srar.com
» San Fernando Valley Home Sales Could Tumble In 2023
San Fernando Valley home sellers should brace themselves for a challenging year ahead, as experts forecast that property sales could plunge in 2023 as rising mortgage rates and out-of-reach home prices sideline more buyers.
According to Realtor.com’s 2023 Housing Forecast, the number of homes sold across the country will likely plunge 14.1% to 4.53 million homes. This represents the lowest number of property sales since 2012 when the nation was still recovering from the housing crash and the Great Recession.
The pandemic triggered a massive boom in San Fernando Valley real estate sales, bolstered by record-low mortgage rates and work-from-home orders from many employers. Since then, home prices have surged almost 40%, and mortgage rates have more than doubled, pushing many buyers out of the market.
San Fernando Valley realtors may feel the brunt of that blow next year as the expected high home prices, and mortgage rates will probably limit the pool of buyers looking at San Fernando Valley homes for sale in 2023.
» A Possible Bright Side for Sellers
While the median sale price of residential properties in the San Fernando Valley has reduced by approximately 2% in the past full year to $840,000, single-family homes in the San Fernando Valley have increased by 1% to $930.000 as per the Southland Regional Association of REALTORS® October report. On the other hand, the Median price for a condominium was up 9% to $630,000 from 2021.
We can expect the prices of single-family homes and condos to be elevated during the first half of 2023 and then fall or stay flat during the year’s second half. Home prices will moderate further over the next couple of months as the interest rates remain high in the near term and seasonal factors come into play.
» Active Inventory Rising
The number of active listings in the San Fernando Valley remained steady. The area saw an increase in active listings by 44% (YoY) in October. However, the number of new listings dropped by about 20% over the past year.
Forecast for Next Year In a Nutshell?
High inflation will elevate mortgage rates, reducing home buyers' purchasing power and depressing housing affordability in 2023. With borrowing costs remaining high over the next 12 months, we can expect a pull-back in sales and a downward adjustment in San Fernando Valley home prices in 2023.
Work with the Best Real Estate Agent in The San Fernando Valley, CA
Are you considering buying a home in the San Fernando Valley? It’s crucial to be in a solid financial position before you start your search. Take some time figuring out a budget and what you can offer a seller, then be sure to stash away enough cash to cover your closing costs.
Every home in the San Fernando Valley is different, and this makes it difficult for home buyers to know what properties are excellent buys. By working with an expert San Fernando Valley realtor, you can easily navigate these issues. At Park Regency, we have enlisted a team of specialists who exert passion, integrity, and professionalism to help you narrow your search and find the ideal place to call home!
Call us at 818-363-6116 or schedule an appointment with our real estate agents today!