Hey guys, today I’ll be diving into November’s real estate update. As we are quickly approaching 2024, many are wondering where our real estate market stands and where it’s going. I have all the stats to break it down. Let’s get straight to it!
Last Month’s Stats
To kick things off, let’s dissect the real estate stats. Last month, a meager 1,562 homes hit the market, marking a significant shortage in inventory. However, for the first time in a while, we witnessed more new listings than pending sales. Now, some may speculate that the market is in a state of flux, but the reality is we’re still in dire need of more inventory. While there’s been a slight uptick, the magic number we’re aiming for is around 2,500 to 3,000 new listings to genuinely impact and ease the pace of our market. As it stands, the inventory gap remains a challenge.
The statistics are also showing that a noticeable gap is emerging between new listings and actual sales, indicating more listings than completed transactions. The underlying question is why. With the broader economic landscape and current global uncertainties, skepticism and concerns are causing some buyers to take a step back, leading to a hesitancy in purchasing decisions. While a decrease in buyer demand might typically influence market dynamics, the real challenge lies in the insufficient inventory. Many homeowners are comfortably anchored in their homes, enjoying low-interest rates between 2.5% and 3.5% on their mortgages. Reluctant to relinquish these favorable rates, sellers are opting to stay put, contributing to the scarcity of available properties. To truly impact the market, we would need a sustained decrease in consumer demand coupled with consecutive months of increased new inventory.
Now, let’s talk home values. Right now, we are in a stable, flat market, neither appreciating nor depreciating. This trend is likely to persist throughout the remainder of the year. The key factor that can elevate our market and drive up property values is the anticipated reduction in interest rates. Once we witness a decline in interest rates, it will act as the catalyst to reignite our market by attracting more buyers. Additionally, this shift is likely to prompt hesitant sellers to enter the market, as they can now sell their property and upgrade to a new one with a more favorable 5% mortgage rate, alleviating the perceived gap between their current 3.5% rate and a potentially higher 7.5% rate. Thus, we’re eagerly anticipating this crucial change as the driving force to revitalize our real estate landscape.
Now, when will interest rates go back down? The Federal Reserve suggests they won’t increase rates further, with analysts predicting stability in rates until at least mid-2024. The bond market has been a recent challenge, pushing rates up to 8%, but analysts foresee improvement and a potential dip in rates around January or February. I anticipate rates returning to the mid 7% range here shortly, then falling to just below the 7% range early next year and staying that way throughout Q1.
Overall, the current real estate landscape appears to be holding its ground, with values and demand maintaining a healthy balance against inventory. However, the challenge lies in a dip in consumer confidence due to global events and concerns about interest rates and affordability. Moving forward, staying informed about the global crisis and closely monitoring the trajectory of interest rates will be pivotal in gauging the market’s future dynamics. As we navigate these factors, I encourage you to reach out with any questions or insights about the local or national real estate market – let’s keep the conversation going. Take care, everyone!
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