2023 was one of the crazier years in recent real estate memory. Throughout the year, buyers and sellers were constantly second guessing themselves between rates, property values and more. Throughout most of the country, as interest rates went up, home prices continued to go up as well and sales continued. This is why rates kept going up despite more and more buyers having a harder time to get approval.
The reality is that rates were brought up to battle inflation and to cool the market down. They have had some success in both efforts but where those rates are going next year and what to expect are difficult to know. However, there are advantages that buyers and sellers can take advantage of in 2024. These advantages need to be considered when you are deciding whether or not to buy or sell.
Advantages For Buyers
Interest rates are going down and because of higher rates, inventory has gone back up a little. This is great for those who want to buy because it means more selection at more affordable rates. However, any advantages you are appreciating with these changes, your competition will be appreciating as well. Yes, there are more homes available but with rates dropping, there will also be more buyers.
Real estate prices have skyrocketed for several reasons but low inventory is one of the biggest. As people look for reasonable deals in their preferred neighborhoods it’s important that you make sure you are ready to buy and look good as a buyer. That means getting pre approved for a loan and also making sure that you have the right realtor on your side.
Buyers also have to focus on being faster and more aggressive with their offers and review of certain properties. If you love a property so will others which is why you need to be ready to not only make an offer, but show that you are the person who is best qualified to work with. Make the buyer want to work with you beyond what you are simply offering.
Advantages For Sellers
Homeowners who are debating to sell will have the advantage of getting high value for their property next year. While some areas have seen a small decline in asking price, if rates drop enough, there will be plenty of potential buyers for each property again, making the asking price more reasonable and also making it easier to get your house sold quickly.
While this is great news for sellers, one thing you may want to look into is the condition of your property. The majority of buyers will not have a lot of money to put into the property if they buy it so making improvements and repairs before listing could give you more value as well as more buyers who are interested in your property.
What Will The Market Do
Property values are not going to decline regardless of the economy or interest rates. If they do, the drops will be minimal because inventory remains so low and there are plenty of investors and buyers who will move forward if they see the right opportunity. If you are thinking about selling, you will have great opportunities to do so throughout the year.
However, if you are thinking about buying, it’s important to focus on the area you want, the budget you have and when is the best time to buy for you. This information is easier to determine when working with an experienced realtor.
No one can know for sure what to expect. However, the goal is to lower interest rates and see if inflation and costs remain reasonable when that happens. Because this will take time to determine, some people may prefer to be more active in the early part of the year while others may prefer to be more passive. This is something you have to determine on your own based on your goals as well as your situation.
What Your Realtor Recommends
When speaking with a realtor, regardless of buying or selling, he or she will recommend that you consider where you are at right now, what your options are and how to make improvements. Here’s some of the top places to start:
- Improve your credit: Buyers are always hit with higher rates and fewer approvals because of high interest rates. Yes, they make an impact on you when you want to buy a home and they also can cost you more money. Get your rates up.
- Get out of debt: Part of fixing your credit is getting out of debt. Lowering your debt will also help you buy a home and get approved for a loan. Focus on your debt first before trying to look for a property, especially if you have over $10,000 in debt.
- Invest in your property or savings: If you are ready to sell or buy you may want to look at the property or your finances. Can they use some work? Investing time and energy into fixing up a property or adding another $10,000 to your down payment may make a huge difference in your real estate efforts.
- Look for stability: Focus on areas that are stable and have been solid and reliable for years. This is where you’re going to get the best information as far as the best properties to buy, what is the best value and more.
Working with an experienced realtor is always the key to not only knowing where the market is, but where it could be going. As you try to set your real estate expectations for 2024, make sure that you speak with an experienced realtor to determine what your options are and what you may need to work on.
When selecting a realtor, focus on someone who is not only experienced, but experienced in the areas you want to buy in. They may not know a specific property better, but they can give you an idea of what to expect in that area, what options are the best and what you need to know.
