As we enter 2024, the real estate market continues to be a topic of great interest and speculation. For sellers, understanding the dynamics of the housing market is crucial for making informed decisions. In this article, we will provide independent insights into the 2024 housing market predictions, drawing from various expert sources.
Interest Rates:
One of the key factors influencing the housing market is mortgage interest rates. According to experts, interest rates are expected to range from the low sixes to the mid fives in 2024. Some even predict that as soon as May, we might see interest rates in the fives. This drop in interest rates is attributed to the efforts to stimulate the economy during an election year, which could lead to more sellers entering the market. Our prediction is that we will see rates hit the fives again, but higher fives and by the end of the year. It will be a slow decrease over the next 11 months. Lower interest rates have a positive impact on sellers, as they increase demand, leading to quicker sales and potentially higher prices.
Price Predictions:
In 2023, Portland experienced a slight depreciation in home prices, which raised concerns among sellers. Nationally, the average prediction for 2024 suggests a modest 1.5% appreciation in home prices. However, our team predicts a slightly more optimistic scenario with a potential 2.5% to 5% appreciation year-over-year. It’s important to note that price changes will vary across different neighborhoods within Portland. Some areas may see more significant appreciation, while others could experience depreciation. Sellers should be realistic and set their prices competitively based on the current market conditions.
Inventory Levels:
Inventory levels play a crucial role in determining the health of the housing market. Currently, Portland has a relatively low inventory of 2.7 months, which has already decreased from 3.5 months in November. Our prediction suggests that we may see an increase in inventory, but it is expected to be absorbed quickly, so it may not significantly impact overall numbers. Sellers planning to list their homes in 2024 should consider starting preparations well in advance, rather than waiting for the traditional spring market, as delays could push the listing into less favorable seasons.
Home Sales:
Home sales are closely linked to inventory levels and interest rates. Our team concurs with the prediction of a 12% increase in transactions for 2024. This growth comes after a 24% decline in home sales the previous year. While positive signs have already emerged in January, it’s essential to consider that 2024 is an election year, which historically affects consumer confidence and may lead some homeowners to delay selling their properties.
Supply and Demand:
One of the most significant factors influencing the housing market in 2024 is the supply and demand imbalance. The first-time homebuyer age group, consisting of approximately 45.5 million people, is the largest ever recorded. This surge in demand poses challenges to the housing market. Experts agree that 2024 is expected to be better than the previous year, with many first-time buyers finally able to enter the market. Despite the occasional prediction of a market crash, the prevailing view is that significant changes in supply and demand are necessary for such a scenario to occur.
Bottom Line:
As we embark on 2024, the housing market appears to be in a state of transition. Lower interest rates, modest price appreciation, fluctuating inventory levels, and an increase in home sales are all factors to consider for sellers. It’s crucial for sellers to stay informed, set realistic prices, and plan strategically when listing their homes. While challenges remain, the outlook for the housing market in 2024 remains positive, especially with a strong demand from first-time homebuyers on the horizon. Happy New Year and cheers to a promising 2024 in real estate!
Join our team on the first video of the year and our 2024 Sellers Market Predictions: