Home Prices Continue To Increase Through 2022

Home prices are predicted to increase by another 16% by the end of 2022.

In part as a result of pent-up demand from the Covid-19 pandemic, the number of homebuyers now consistently exceeds the number of homes available, heating up an already hot California real estate market. According to Goldman Sachs, although the prices of homes are incredibly high, they have yet to peak. Sachs predicts that by the end of 2022, real estate prices will increase by another 16%. Even with home prices being at record highs, homes are still considered “relatively affordable” due to low mortgage rates. But with such strong demand for homes and such little inventory, prices will continue to rise. 

The model from Goldman Sachs takes into account supply, demand, affordability, and the pricing of homes. It predicts that the demand for homes along with the low inventory available will make homes so unaffordable that people will continue to drop out of the real estate market. With the demand then being reduced, more inventory will eventually come on the market and the imbalance of supply and demand will no longer be such an issue. But this will not occur before the expected continued increase of home prices before the end of 2022. 

With home prices continuing to increase, rents will also continue to rise, and although there are many efforts from Congress and states individually to lessen the severity of the housing shortage, it is unlikely to be enough of a change to head off the near-term glut.

Sea to Sierras Realty, Inc. has successfully sold properties up and down the California coast, typically above asking price, with multiple offers, and short escrows. Exclusively a listing broker, we specialize in maximizing value for our sellers, and we have been doing it since long before the current hot housing market. Contact Sea to Sierras Realty, Inc at (858) 249-1499 today, or email us here.