The real estate market has been quite volatile in recent years. During the pandemic, low interest rates along with high demand led to homes selling quickly and far above the listing price.
More recently, higher interest rates have put homeownership out of reach for many. This has also caused lower inventory since many homeowners are reluctant to sell now.
Will any of this change in the coming year? Keep reading to learn more about important real estate trends that will impact the market in 2024.
Inventory May Start Growing
Home inventory has been low for a while, but it may start growing in the coming months. If you've been house hunting lately, you probably noticed that houses have been flying off the market. More inventory means less competition for buyers, so now might be the perfect time to buy.
Many sellers have recently enjoyed their pick of offers. Growing inventory means more competition among sellers. Make your home as appealing as possible to make sure you still get offers coming in.
Mortgage Rates Will Start to Ease
In December, 30-year fixed mortgage rates dropped to 6.95%. This is the lowest they've been since August 2023. Rates are expected to continue slowly declining.
Mortgage rates impact how much buyers can afford, so lower rates may convince more people to buy in 2024. This is good news for sellers too because more buyers means your home may sell more quickly.
Home Prices Are Increasing, For Now
Home prices are still increasing year over year, but the pace has slowed down. Some experts expect home prices to remain elevated going into 2024, while others anticipate a slight price decline.
Even though prices may go down, buying a home may still be out of reach for many in 2024. If you do plan to buy, make sure your monthly payments aren't more than 25% of your take-home pay. If possible, it's also a good idea to make a 20% down payment.
If you're selling a home, higher prices mean you'll likely make a profit. This will give you extra money to put towards your next home.
The Market Will Become More Buyer-Friendly
Many realtors feel that we've started to see a shift to a buyer's market in 2023 and that trend will continue. Higher inventory along with declining prices will give buyers more options than they've had recently. Bidding wars are less likely and buyers may have the upper hand in contract negotiations.
A buyer's market means more competition and fewer offers for sellers. Take the time to make your home stand out from the competition. Be prepared and willing to negotiate with buyers.
Stay On Top of Real Estate Trends
Real estate trends change from year to year, so it's a good idea to keep tabs on the market if you plan on investing in real estate. Trends vary from one city to the next, so make sure you stay on top of local trends as well.
Whether you're a first-time homebuyer or a seasoned real estate investor, PMI San Diego is here for you. With over 20 years of experience, our team will help you navigate current real estate trends.
Get in touch today to learn more about our realty services.