The experts predict that we could see another year of massive home price appreciation. Home prices have already risen 20% from 2020, but the underlying cause of this increase, the housing shortage,
Market Update November 2021- Prices will continue to rise
Dated: November 12 2021
The experts predict that we could see another year of massive home price appreciation. Home prices have already risen 20% from 2020, but the underlying cause of this increase, the housing shortage, is far from over.
The housing market increase this last year was caused by low interest rates, low housing inventory, and increased demand from both millennials and investors wanting to hedge against inflation. Jan Hatzius, the head economist at Goldman Sachs, writes, “The supply-demand picture that has been the basis for our call for a multi-year boom in home prices remains intact.”
2022 will see similar home price appreciation. “Our model now projects that home prices will grow a further 16% by the end of 2022,” Hatzius continued.
The supply of homes has increased since last spring, but it is still well below pre-pandemic levels. Numerous issues are preventing new homes from coming onto the market and easing the low supply : supply chain disruptions, lumber shortages, lack of available plots, and labor shortages facing the construction industry.
The best solution at the moment to this housing shortage would be to ease zoning restrictions. While some states are considering or even passing legislation to do just that. With all of this in mind, it seems like there is no end in sight for the housing shortage.
Allison James Estates & Homes