Let’s wrap up 2023 with one more comprehensive look at the real estate market. Here’s a deep dive into the numbers, trends, and projections that shaped the past 12 months and anticipate what lies ahead in 2024.
Alright, let’s kick it off with the current state of the market. Inventory has been on the rise throughout end of the year. Despite a glimmer of hope in October and November, December isn’t showing the numbers we were hoping for to help increase inventory. Out of the 1,154 homes hitting the market in December, we’re still seeing more sales than new listings, marking 10 out of the last 12 months with this trend.
Zooming out to a year-over-year perspective, 2023 witnessed a staggering negative -32% change in inventory, continuing a trend from 2022. This has inevitably led to a -24% drop in home sales, creating additional pressures on an already competitive market.
Year-over-Year Sales and Market Dynamics
Amidst the ebb and flow of inventory and home sales, it’s important to recognize that our home values are holding steady, showing a resilient 2.8% appreciation. Despite the challenges in the market, this stability in home values adds a reassuring layer to the overall real estate landscape.
Days on Market and Affordability Concerns
One thing we can’t ignore is the increase in days on the market – up by 24%. I blame it on an affordability crisis, with interest rates hitting 8% and affordability dropping by 7%. As homes become less affordable, it’s only natural that it takes longer for them to find new owners.
Projections for 2024: The Role of the Federal Reserve
Looking ahead, I’m cautiously optimistic. Projections suggest multiple reductions in interest rates in the middle of next year, with rates potentially dipping into the fives by 2025. The critical factor to watch in 2024 is the trajectory of inventory levels. While the data is showcasing a positive trend, we need sustained growth. A potential flood of buyers, coupled with lower interest rates, could bring about a balanced market with a four to five months supply of inventory.
Advice for Buyers and Sellers
Buyers: Don’t wait. With a 1% drop in rates since October, proactive buyers might find opportunities, especially considering the expected resurgence of buyer activity in the coming year. You can always refinance out when rates drop!
For all my sellers out there, strategic pricing is key. As inventory levels increase and days on market extend, position your property as the next to sell. Analyzing the competition and pricing competitively will be essential for success in this evolving market.
Wishing each and every one of you a joyous holiday season surrounded by loved ones. If you have any questions about real estate opportunities in the new year, please reach out to me or anyone on the True Local Team!
- If you are thinking about buying or selling we would love to help!
- Visit us at TrueLocalRealty.com
- Or give us a call at 888-503-3117
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