We are nearing the end of the First Quarter in real estate, and The Gamache Team is prepared to offer you the latest 2024 Real Estate forecast. We will cover what to expect as a seller and a buyer as well as interest rate predictions and more based on information received from CAR and trusted professionals.
Comparing the 2024 Real Estate Market with Traditional Markets
In a traditional market, the real estate market would be in full swing. Sellers would have prepped their homes for the market and eager buyers would be attending open houses with an intent to purchase the home of their dreams.
Lenders would be guiding their clients with reasonable mortgage payments based on reasonable interest rates. If a buyer lost out on a home or walked away due to price or another issue, there would be other homes from which to choose at comparable prices.
But 2024 has yet to enter a market that is even close to a traditional busy market. Low inventory, high interest rates, and high home prices based on supply and demand have slowed the 2024 real estate market.
Sellers eager to move up or downsize are sitting in their homes due to low interest rates from refinancing a few years ago. The thought of moving, having a higher interest rate and paying a higher mortgage for less home is not appealing to homeowners, leaving less inventory for buyers.
Eager buyers whose buying power has now decreased due to higher interest rates are looking for the perfect home. So, homes that need some work or a major renovation are sitting on the market longer. Once that move-in ready home becomes available, interested buyers are flooding open houses and often creating bidding wars and some are back to offering over asking price.
Frustrated buyers who have been waiting to purchase a home are torn between buying a home now at a higher interest rate but a better sales price or waiting for a lower interest rate for a lesser priced home.
2024 CAR Real Estate Market Forecast
California Association of Realtors (CAR) predicts that the market will rebound in 2024 once mortgage rates ebb. “Slower economic growth and cooling inflation will bring down mortgage interest rates in 2024 and create a more favorable market environment to spur California home sales next year,” according to a housing and economic forecast released by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
Other predictions include a 6.2% increase in median home sales, an increase in inventory once rates decrease, housing affordability will remain at 17%, the same as last year, and home prices will continue to increased based on supply and demand principles (source).
C.A.R. President Jennifer Branchini, a Bay Area REALTOR® states, “A more favorable market environment with lower borrowing costs, coupled with an increase in available homes for sale, will motivate buyers and sellers to reenter the market next year. First-time buyers who were squeezed out by the highly competitive market in the last couple of years will try to attain their American dream next year. Repeat buyers who have overcome the “lock-in effect” will also return to the market as mortgage rates begin to trend down.”
Predictions for Interest Rates
Federal Reserve policy makers declined to raise interest rates for a fourth straight meeting, signaling a possible end to raising rates and the start of lowering them.
The Feds will meet again in March to decide whether or not to lower rates. According to CME Group, Chicago Mercantile Exchange, “Markets are currently pricing in a 63.5% chance the Fed will begin cutting interest rates at its next meeting in March.”
Advice for Buyers and Sellers Regarding the 2024 Real Estate Marketing Forecast
The Gamache Team is an experienced team of professional Realtors who have been in business for almost 50 decades and have withstood the test of real estate market ebb and flows. Our advice for both buyers and sellers is to sit down with a Realtor who is familiar with the market and can discuss the pros and cons of both selling and buying verse waiting out the market.
Have a trusted professional analyze your personal situation with real numbers so you can decide the best course of action to take. Consider how an increase in home prices vs waiting for a lower interest rate may affect buying power.
Think about how much more competition there will be if you wait to either purchase a home or sell yours. How much of a hurry are you in? Can you handle a higher mortgage rate now if you know you can refinance when rates go down? Will any fees you pay make financial sense if you choose to refinance in a few years?
Do you have realistic goals on how much you can afford and will waiting price you out of your dream home?
What makes sense to you based on your principles, desires, goals, and finances?
Contact The Gamache Team
If you are considering purchasing or selling a home in 2024, speaking to a neutral party that can assess your individual situation makes a lot of sense. The Gamache Team has experience in all types of real estate markets and the 2024 Real Estate market is no exception.
Work with us to align your real estate goals and principles to decide if now is the right time to purchase or sell or if waiting is a better option.
