It’s been a wild year for Bay Area real estate — and not in the way we’ve grown accustomed to. After a hotter-than-hot 2021, 2022 started out with a bang, only to cool dramatically in the second half of the year. As interest rates rose, stock markets softened and tech layoffs abounded, the Bay Area housing market started to contract for the first time in years. One report even said the Bay Area metro is no longer the least affordable housing market in the U.S. The rental market stayed fairly steady as well, remaining below pre-pandemic levels and showing no signs of reclaiming its title of the most expensive market in the U.S.
Predictions are just that, and if last year’s forecasting taught us anything, it’s that markets can drastically change, even within a year. We talked with Bay Area economists, realtors and data analysts to better understand what they think will happen in the 2023 housing market.
It’s finally a buyer’s market, maybe
Bay Area buyers have experienced years of intense competition, excessive overbidding and the need to waive contingencies when it comes to writing an offer. Finally, the tides may be turning. “There is more choice and less competition than there has been for many years, which means greater opportunities for buyers,” Compass Chief Market Analyst Patrick Carlisle said. “Pay less attention to, or even ignore, what sellers are asking for and make offers at the price you want to pay. Some beautiful homes, luxury and ultra-luxury houses and condos, are selling at large discounts off asking prices. A buyer who can close the deal currently holds the balance of power.”
Even with higher interest rates adding to the cost of a mortgage, the overall prices on homes may be