WHATS NEXT FOR THE BAY AREA HOUSING MARKET IN 2024
After the highest mortgage interest rates in over 20 years and the slowest volume levels of listed and sold homes in 2023, what can we expect to see in 2024? As the Fed starts cutting rates interest mortgage rates will follow suit which will lead to more homes hitting the market next year and the cost of buying a home could level off somewhat.
More homes on the market
More homes are expected to hit the market, as homeowners accept that mortgage rates aren’t likely to fall significantly anytime soon. More homeowners who locked in long-term payments when rates were near all-time lows are expected to list their homes for sale as they get impatient with waiting for historically low rates to return, which is not going to happen. If we can see sustained rates in the 5’s more sellers will be willing to list their homes for sale
Home buying costs to level off
Affordability will remain the top concern for potential home buyers next year. Inventory will likely increase from 2023 levels, but will still not be sufficient to meet the demand of buyers. The lack of inventory, and declining rates will likely see values continue to rise.
Single-family rentals will be the new starter home
Despite this slight improvement, many households will remain priced out of the market. That will see demand and prices for single-family rentals continue to increase. One possible path to more single-family rental inventory is homeowners deciding to turn their homes into an investment property and rent it out rather than selling it when they move. The ultralow mortgage rates held by existing homeowners make it more likely that this option would pencil out.
Traditional home buyers to compete with flippers
The types of homes typically sought by flippers — homes that need a bit of work — will see increased interest from traditional home buyers. Faced with limited choices, buyers will be willing to overlook small flaws.
Cash will still be king
In 2023 over 45% of the transactions were cash, this same pattern is expected to continue into 2024, especially in the upper end of the market. Older generations, who tend to have more cash to put down on homes, are still going to continue to play a major factor in the 2024 housing market
Tips for Buying in Today’s Housing Market
A few tips for aspiring buyers:
Move to a lower-priced housing market if you can switch jobs or work remotely
Align yourself with a local Realtor & have them sign you onto the MLS
Get all your ducks in a row in advance so you can act fast—review your financial situation, gather required documents, shop multiple lenders and strengthen your credit score
Check prices and listings regularly to beat out the competition
Know how much your monthly payment will be—complete with taxes—and how well that fits into your budget
Tips for Selling in Today’s Housing Market
TIps and advice for sellers:
Work with a real estate agent to get your pricing right, encourage buyer competition and sell faster
Get your home in shape to sell sooner rather than later
Set up your home’s online curb appeal
Include a 3-D home virtual tour or an interactive floor plan in your listings for more page views and saves
Staging…while it can get costly in a market where buyers are increasingly picky, you want to stand out, and a well staged house is a must!
Whenever you feel ready to discuss your personal situation and goals in greater detail, reach out to schedule a no-pressure consultation and we’ll talk about all your options.
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