As the year 2024 unfolds, homebuyers near Portland are eagerly anticipating what the housing market has in store for them. In this article, we present our independent analysis of the 2024 housing market predictions, based on insights gathered from industry experts such as Keeping Current Matters and Altos. Our team has spent hours researching trends, economic indicators, and real estate reports to provide you with valuable insights that can guide your home-buying decisions.
Rates: A Steady Path to 5.8%
One of the key factors influencing the housing market in 2024 is interest rates. Interest rates are expected to trend down slowly throughout the year. While they are unlikely to reach the historically low 3%, our prediction is that they will hover around the high 5% to low 6% range by end of year. This range is considered realistic and favorable for homebuyers. It’s worth noting that extremely low interest rates can disrupt the market by driving up competition and prices, making it challenging for buyers.
A 3% interest rate, although tempting, can lead to market chaos. Buyers end up bidding significantly over asking prices, often incurring extra costs. A more normalized interest rate, such as 5%, is believed to strike a balance in the market, fostering healthier conditions for both buyers and sellers. Thus, our prediction for interest rates in 2024 is approximately 5.8%.
Prices: Modest Appreciation Expected
The trajectory of home prices is a significant concern for prospective buyers. In 2023, Portland witnessed a slight depreciation in home values due to variations among neighborhoods. Some areas experienced appreciation, while others saw depreciation, averaging out at a 0.5% depreciation for the city as a whole. However, in 2024, we believe that with more sales and decreasing interest rates, there is an expectation of modest appreciation ranging between 2.5% and 5%. This prediction should bring stability and balance to the market.
While buyers in 2020-2022 enjoyed double-digit price increases, that such explosive growth is unlikely in 2024. The positive news is that if you buy a home in early 2024, you’re likely to witness appreciation, and refinancing may become an option as interest rates continue to trend down.
Inventory and Home Sales: A Buyer’s Market
The dynamics of inventory and home sales play a crucial role in shaping the real estate landscape. In 2024, there’s a promising outlook for buyers. We predict a 12% increase in inventory, driven primarily by motivated sellers. This motivation stems from factors like affordability and more favorable interest rates.
Currently, Portland has about four months of inventory, which is considered balanced. However, this balance isn’t because there are more houses on the market; rather, it’s due to homes staying on the market for longer durations. In 2024, the expectation is that more sellers will list their homes as conditions become more conducive. This increase in inventory aligns with expert opinions across the industry, projecting a 12% to 15% rise in available homes.
The absorption rate, or the pace at which buyers purchase available homes, will keep the months of inventory relatively low. Consequently, days on market are anticipated to trend downwards, reversing the trend seen in 2023. While not reaching pandemic levels of activity, 2024 promises an active and vibrant market for both buyers and sellers.
Election Year Effect: A Positive Outlook
Historically, election years have had a mixed impact on the housing market. While elections may influence factors like interest rates and consumer confidence, they haven’t consistently boosted home sales. However, 2024 is poised for increased home sales due to the presence of motivated sellers and a healthier inventory.
Final Thoughts:
In conclusion, 2024 appears to be a promising year for homebuyers near Portland. With interest rates expected to stabilize around 5.8%, modest home price appreciation, increased inventory, and motivated sellers, the conditions are favorable for those looking to enter the housing market. While it may not replicate the meteoric growth of previous years, 2024 is poised to offer opportunities for buyers to make wise investments in a more balanced and stable market.
We invite you to share your thoughts and any scary new articles you find about the market. Your feedback and insights are valuable as we navigate the ever-changing landscape of the real estate market.
Join the conversation in this weeks market update video with Michele, Johnny, and Randolf: