Welcome to January, 2024. Seems unreal that we are here doesn’t it? Time is flying by and even though 2023 was a rough year in the real estate world, there were some good signs and reasons for optimism. Everyone is impacted by real estate marketing differently. High prices are great for homeowners looking to sell, but not great for those looking to buy. Interest rates are hurting both buyers and sellers right now and inventory is increasing because of it.
You may not have missed the window as far as value goes, but you may have missed the window as far as being able to sell your property quickly. Things have cooled off drastically and the reality is that people are looking for options as they start 2024. Keep in mind, the only way to really know what your best options are is to speak with a realtor. They can take into consideration important factors like your finances, the current market, the local markets and provide you with your best options.
Current Market
Currently, the real estate market is healthy, but cold. The reason for that is because home prices are staying strong. If your property had shot up to the $500,000’s last year, it should still be there even if sales are down. Value is important because it tells people whether or not the market is remaining strong. Yes, fewer sales are starting to drive down asking prices. However, those processes were already at record highs meaning most properties have room to go down a little.
Interest rates are high and that is because of inflation shooting up. Currently, rates are staying put and even dropping a bit. However, that may only be temporary as regulators are reviewing every piece of data. Yes, the housing market is an important part of the economy but it will not influence decisions on rates.
How We Got Here
With prices going up too fast, the cost of borrowing money became too generous, meaning people were once again borrowing beyond what they can reasonably afford long-term, especially if their properties do not continue to go up in value. This created an issue in the market where homes were still being purchased but at elevated rates and with way more money borrowed than should be.
The difference between someone who owes $400,000 on their home at a rate of 3% versus the same owed but a rate of 5% is significant and impacts everything from your monthly payments to how quickly you can pay the house off. Rates are high but the hope is that the higher rates will help calm prices down, which has shown to be effective.
Where Are We Going
No one can be sure what is going to happen in 2024, especially with the economy. The hope is that prices and inflation will stabilize, allowing for rates to drop a bit. This would give renters an opportunity to buy property, even with higher values than they’ve seen in past years.
The job market is also remaining strong which means that there should be a major increase in buying as soon as interest rates drop a bit. If your property is on the market for more than five months, you may want to consider waiting because right now, the quality buyers cannot afford to buy. Yes, there are properties being sold but the buyers either make a lot of money or are looking at the property like an investment.
What Should You Do
Speaking with a realtor is the best way to go for anyone. They can access important data that tells them how local markets are doing, offer you guidance on what your best options are and more. One of the most common mistakes people make when the market is having challenges is that they pay too much attention to the national data or news. Yes, homes are not selling right now but there are areas where that is not the case and buyers are still looking for new options.
A realtor can review your property, go over your finances and discuss your best options moving forward. Whether you want to buy or sell a home, you need to know how to best move forward and if now is not the right time, what needs to happen for new opportunities to present themselves. That’s where a realtor can make a big difference. If you are not sure where to get started, contact a local realtor today for guidance and assistance.
