If we were to rate the real estate market in 2024, we would have to say it was a solid C. Some would argue it was better while most would say we’re being nice. Yes, this was not a banner year for the market as interest rates and housing prices slowed the market significantly when compared to where it was in 2020 and 2021. Those who were not prepared for the slowdown have struggled to either purchase a new property or sell their existing one.
Home sales are down, but that does not mean the real estate market is out. The industry saw a lot of new trends this year like the emergence of assumable mortgages. These rare options allow for a buyer to take over the homeowners current loan in an effort to cut down their interest costs on a new mortgage. Other strategies are also being utilized to assist buyers and that’s where 2025 is showing more promise.
2024 Was Not An Easy Year
If you make your money in real estate, 2024 was considered a lean year. You did not see home values go up, or even down for that matter. In fact, buyers complained that home prices were the most frustrating part of their year. Yes, interest rates make it difficult to buy but usually that means some sort of drop in price to accommodate. That did not happen, which can also be taken as a good thing.
If you are a buyer, it’s not great that you saw prices drop only a little while interest rates remained high. However, if you are a seller, you cannot help but be impressed that despite a major slowdown in the market, home values have remained up. That means that sellers can still demand fair value and if they can afford to wait, they may get a reasonable offer.
Positives In Real Estate
There are even more positives to consider for the current market and the market moving forward. Investors who benefit from buying and selling property may not have seen the best numbers yet. However, investors who buy property to rent it out saw more interest in their properties than they have in recent years. With fewer people able to buy right now, renting interests are up.
That means if you already owned rental properties, you were able to find reliable tenants who helped you cover the cost of those properties and maybe even made a little profit for yourself. While you may not have enough of a profit margin to make selling worth it, knowing you have years of passive income to rely on cannot be upsetting.
Inventory Is The First Key
For those interested in buying there is one major advantage that you have going into next year. What originally drove prices up in the market was inventory and while prices have remained high, inventory has increased as well. There will be more buyers next year and they are extremely motivated to buy. If interest rates are lowered even a little, combined with home prices being lowered a little because of inventory increases, buyers will have new advantages in 2025 that they have not had in recent years.
Sellers will also have a more aggressive market to choose from and while it is not a sellers market, they will have better options than they’ve seen thus far, especially if your house was just listed recently. The best way to get real value for your property right now is to just be patient.
How Can You Get Ready For 2025?
If you are looking to buy in 2025 focus on your credit score, income and debt. Improve those areas and save up what you can so that the banks know you are serious. If you are thinking about selling, invest some time and money into fixing up your home. One of the issues buyers are having is that they can afford a property but they will be cash poor when they buy and unable to fix it up. Fixing your property up for potential buyers can make your property gain a lot more interest.
