Looking Back On 2022’s Housing Market & Ahead At What 2023 Holds
In 2022, home prices in the Eastern Sierra continued the trend set the previous year, with a 6% rise in the median price from $452,500 to $478,000. This brings growth in the Bishop area median home price over the last five years to 48%. While prices were up, the number of properties sold decreased 20% from the year prior.
National and statewide sales prices of existing single-family homes have been on an incline for the past several years, with a shift in the market during 2022. Locally, home prices peaked in 2006 and then steadily declined through 2011. The combination of low interest rates, low inventory of available homes and the pandemic, caused home prices to rise over the past 4 years. Rising inflation and the subsequent rising interest rates over the past year has caused the housing market to soften.
Interest rates, currently near 6.2% for a 30-year fixed rate loan, have increased over the past year. At this time last year rates were at 3.75%. On a $450,000 mortgage this is a difference in monthly payment of almost $675 per month. This increase in interest rates has priced many buyers out of the market or cause them to reconsider their move.
The number of distressed sales in the Bishop market have disappeared, dropping from 3 in 2020 to zero in 2021 and one in 2022. A distressed sale includes any home that is either a foreclosure or a short sale where the seller is selling the home for less than the debts against the property. Some experts predicted a rise in distressed sales caused by the pandemic and interest rate increase; however, we have seen no signs of that occurring.
Inventory available for sale remains extremely low. At the end of December there were only 17 homes on the market, down from 27 homes available in June. There is currently a 2.4 month supply of homes priced between $300,000 and $400,000. This means if no new homes come on the market, the existing inventory would be sold in just over a month. Generally, any inventory below six months is considered a sellers’ market. Fifty three percent of all homes sold in 2022 fetched $500,000 or below. The number of higher-end home sales or those above $500,000 remained increasing from the year prior. Twenty-six homes above $500,000 closed in 2018, 32 in 2019, 42 in 2020, 55 in 2021, and 71 in 2022.
Interest rates and the inventory of homes available for sale will continue to be the primary factors affecting sales in 2023. Rates trending lower and a lower number of homes for sale should prevent prices from declining.
Jake Rasmuson is a 1999 graduate of Bishop Union High School, and has a Master’s of Science Real Estate degree from the University of San Diego. He is the Broker at Bishop Real Estate Rasmuson & Associates.