If you’re putting off home buying in hopes that home prices will decrease in Denver – or nearly any popular metro area across the U.S. – you might be in for quite a wait.

Home prices are already up 20% year-over-year, but according to a new Goldman Sachs market forecast, they may not have reached highest point yet. Not by a long shot. In fact, Goldman Sachs economists predict that home prices will grow another 16% by the end of 2022.

The rapid increase in home prices over the past year is due to a number of colliding factors including low interest rates, tight housing inventory, pandemic-induced migration patterns and an increase in millennials entering the home buying market. In addition, as fears of inflation increase, many investors are buying properties as a hard asset.

Although inventory has slowly been increasing over the past few months, it is still below pre-pandemic levels, and the homebuilding industry has not been able to fill the void due to material and labor shortages. Construction employment is still 201,000 jobs below its February 2020 level, according to the U.S. Bureau of Labor Statistics.

A possible solution to the tight housing inventory and escalating home prices offered by Goldman Sachs economists is the relaxing of zoning laws.

One state trying to using zoning to ameliorate housing issues is California, which recently banned single-family zoning throughout the state (with caveats), opening the door for more multi-family residences to be built. However, Goldman Sachs economists don’t believe that such changes will be widespread across the country.

Historically, fall and winter are slower selling months for Denver, and with prices only going up, now could be a great time to start looking. Mortgage rates are still incredibly low and we’re not seeing the outrageous bidding wars that happened in the spring and summer months. Ready to discuss your options? Give Metrowest a shout today!