Derry's Condo Headshot

Derry's Condo Headshot

Tuesday, December 7, 2021

Housing Prices to Increase Another 16% for 2022

 Goldman Sachs is reporting that they are forecasting another 16% increase for 2022. Is this realistic? Let's discuss what might be leading Goldman Sachs to this conclusion.

1. Low Inventory- People aren't selling when they don't know where to go and don't want to experience the pressure that is this current market.

2. Supply Chain- Although builders are very optimistic, they're ability to provide inventory in a speedy manner is being inhibited with our supply chain problems. This is contributing to our low inventory and preventing our first time home buyers from becoming home owners. 

3. Investor Participation- Investors are flooding the market for two reasons. First, with first time home buyers being left out of the market, people working from home and supply chain problems preventing new inventory being added, rents have increased sharply making investor profitability increase. Second, some are looking to purchase out of fear of inflation. Just yesterday, I spoke with another agent who has a client looking to purchase everything as fast as he can because he's concerned that the market will run away on him. 

Despite the state's efforts to add inventory either with SB-9 or ADU and Junior ADU laws, it's not enough to combat our spike in housing prices. According to Goldman Sachs forecasting models, we're looking at another 16% Increase for 2022. For more information, check out the article below. 

16% increase in housing prices for 2022- Goldman Sachs

No comments:

Post a Comment