| 2024 Market Predictions: Will Home Prices Drop?
|  | Dear Friends,
Happy New Year! I hope everyone had a wonderful holiday season. Before delving into the trends, it's important to say that general market dynamics impact individuals differently based on their personal situations and needs. Therefore, don't hesitate to reach out to me for personalized recommendations tailored to your specific circumstances.
With home values and interest rates still being relatively high, both buyers and sellers are wondering what's going to happen to the market in 2024. Typically, home values increase when demand is high and supply is low. Conversely, prices tend to decrease when the housing supply is high and demand is relatively low. So, what will the conditions look like this year? Let’s look at the latest market trends.
What is the Market Currently Like?
Today's housing market is characterized by high prices, high interest rates, and low supply. While high prices are typically driven by strong demand, the current demand is somewhat normal. Inventory is still low, however, which allows sellers to retain higher prices. Since interest rates and home prices are high at the same time, many potential buyers are finding it difficult to afford a purchase.
Will Interest Rates Drop?
The Federal Reserve has steadily hiked interest rates since March 2022 in order to slow inflation. Interest rates held steady from July through December 2023, with mortgage rates dropping slightly, but what can we expect in 2024?
As inflation has improved in recent months and is projected to continue falling in the year ahead, the Federal Reserve has signaled that we could see several rate cuts in 2024. There is still a possibility of rate hikes, depending on inflation and other economic factors, but so far, the outlook is hopeful. Lower rates would make it more affordable to buy a home.
Will Home Prices Drop?
While home value appreciation is expected to slow down, it's not yet clear if home prices will decrease. Given recent trends, some areas may experience a price increase of around 3-4%, while others may see a drop of 1-2%. Prices are directly connected to housing inventory. Unless there is a considerable increase in inventory, home values will remain high.
Will Inventory Improve?
The number of homes on the market is still relatively low and is showing a declining trend compared to the same time last year. To reach a balanced market, around 5 to 6 months of supply needs to be available at a given time. The current inventory is only enough for a 3.4-month supply. It's believed that inventory levels will improve somewhat in 2024, which could help with home prices. However, it is likely that new home construction will not reach healthy levels until 2025.
All the above indicate that home prices are unlikely to drop significantly in 2024. Until we see any significant changes to interest rates, inventory levels, or home prices, it will remain mostly a seller’s market. The market can change quickly though, so if you’re ever curious about our local conditions or want to discuss how the latest market trends may affect you, reach out anytime.
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| | My Recent Sales and Listings | | Just Sold in the Foothills
5010 E. Valley View Rd. - I listed this saguaro studded land in the middle of the Foothills and it sold in 9 days! The 2-acre parcel was listed at $675,000 and the 1-acre parcel was listed at $330,000. One buyer purchased both lots for $936,000.
Just Sold in Tanque Verde Valley
4712 N. Palisade Dr. - My clients purchased this move-in ready, one-story adobe bungalow on a quiet street off Bear Canyon and Snyder. 3 Bedrooms/2 Baths, 1639 sqft with a pool. It was listed for $490,000 and sold for $486,000.
Just Sold on the West side in 85745
1900 N. Takahe Way - My client listed his long-term rental property, and we are currently moving through a 1031 exchange. I listed the 4 Bedroom/2 Bath, 1750 sqft home with a pool and views for $419,500. Multiple offers were received, and it sold for $424,000.
Just Listed in the Foothills at Swan and Sunrise
5675 N. Camino Esplendora Unit 6136 - Dakotah Hills is a gated condominium complex, but this Unit feels just like a townhome. You have a neighbor on both sides but no one above or below you. This two-story, 2 Bedroom/2 Bath unit has a Loft and is 1406 sqft. The loft has a walk-in closet and can be used as an office or separate living area. Private courtyard with security door and a pet door. Updated throughout with NEW paint, NEW kitchen appliances, NEW matte black fixtures, fans and lights, a NEW Bosch HVAC system with app-controlled thermostat. HOA dues are $285 a month and include exterior and roof maintenance and a heated pool and spa. Fire protection and water are included in the dues too! Washer, dryer and refrigerator are included. This is a perfect "lock up and go" place to call home. Listed for $355,000
Under Contract in Northwest Tucson
3686 E. Canter Rd - My client was looking for a place to escape the Colorado snow. This 3 Bedroom/2 Bath, 1364 sqft single-family home is move-in ready and has an awesome view of Pusch Ridge! Great room floorplan, two-car garage, a covered patio and a landscaped backyard. Listed for $349,000. In my next newsletter, I will disclose the sales price.
Until next time, enjoy our Arizona sunny skies and crisp winter weather. Thank you for your business! I always appreciate your confidence in me.
Sincerely,
Mary |
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