The real estate marketing in 2023 has finally cooled off. After a record surge over the last five years, prices have doubled and in some areas tripled. Properties are becoming more and more difficult to get and in some areas its inventory that is a bigger issue than price. If you are not sure whether or not you have any advantages in the upcoming year, you have to look at the current state of the market, the area you want to buy in, your personal finances and other factors to determine if now is the right time for you to buy or sell.
It is recommended that you consult a realtor who is experienced in your area before you look at moving forward either way. Regardless of the market, there usually are advantages for both buyers and sellers. However, it’s important to know how each market works for you and against you so that you can make the best decisions as far as managing it and utilizing your advantages so that you can get more money or find properties at a better price.
Advantage For Buyers
Believe it or not, one of the key advantages for some buyers next year is going to be that in 2024, interest rates will start out very high. That means, if you still qualify for a quality mortgage, you are going to be part of a much smaller pool of potential buyers, giving you less competition and a chance to get the property you want. While you will have to pay higher interest on your mortgage for a bit, you may benefit from having fewer bidders on the property you want. Another advantage buyers may find is with a slight increase in inventory.
Again, the market is cooling a little and that means homes are staying on the market much longer than they were before. Not only are prices dropping a little, but homes are not being grabbed up quickly, meaning that buyers have more options to consider in a desired area. Buyers also can take advantage of the fact that many of these properties have been listed for months and that a reasonable offer may get a seller interested, especially if they have had to drop their asking price.
Advantage For Sellers
Sellers are going to see buyers who are hungry and focused on getting a property sooner rather than later. That field may be smaller, but each buyer will be qualified and able to buy. As you look for options on what to do with your property next year, you will get a reasonable offer on a home that you list. However, it may take a bit longer than it would have in previous years. The easiest way to plan for this is to either plan on waiting a bit longer, or lower the original asking price.
If you have a fair asking price when you list the property, buyers will be too concerned with competition landing the property before they can that they will not wait or try to get a better deal. That’s the value of sticking with reasonable asking prices. They can create a new market for your property because buyers cannot wait to offer you something reasonable.
Disadvantage For Buyers
Buyers in 2024 are going to see a variety of disadvantages from high interest rates and low inventory to higher home values and properties that need a lot of work. One of the biggest challenges for buyers is that many of the single family properties they have an opportunity to buy are over 40 years old. That means they need to be repaired or completely remodeled. These additional costs make the property completely unaffordable for the buyer and also greatly reduces the long-term investment value of the property. Even with a lower asking price, these properties are still far too expensive for most people to invest in for the short or long-term.
While home values have gone down some, it’s believe that as soon as interest rates begin to fall, a surge on the current inventory will begin again. If it becomes more affordable to buy these houses, and they are listed 20% less than they were in 2023, it makes sense for buyers to take advantage and grab a property that they wish. However, while this is great for the market and the first wave of buyers, it will eventually lower the inventory numbers once again and push home values up. Will that happen in 2024? It’s too early to tell.
Disadvantage For Sellers
The next year is going to be a challenge for sellers depending on when they sell. If you plan on selling in the early part of the year, you may be able to get near asking price. However, if prices drop towards the middle of next year, it’s going to be difficult to determine if prices will rebound before the end of the year and if so, by how much. Ideally, if you are looking to sell, your best bet is to focus on early 2024 because that may be the best time to grab the highest possible value and highest amount of quality demand for the property.
As you look for options and guidance, find an experienced realtor who works the area you are most interested in. Their guidance can tell you exactly how to handle the current market based on your interests and goals. There are tons of advantages to consider that are available to you but only with an experienced realtor can you utilize them and help yourself. Remember to consider the state of the market in your area as well as the condition of your property if you are trying to sell. Your property may not be in the shape it needs to be in if you want to sell it quickly. If you are able to make improvements to the property, it can drastically improve your chances of selling it quickly as well as getting fair market value.