Expert Quotes on the 2024 Housing Market Forecast

Expert Quotes on the 2024 Housing Market Forecast

If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market in 2024. In 2023, higher mortgage rates, confusion over home price headlines, and a lack of homes for sale created some challenges for buyers and sellers looking to make a move. But what’s on the horizon for the new year?

The good news is, many experts are optimistic we’ve turned a corner and are headed in a positive direction.

Mortgage Rates Expected To Ease

Recently, mortgage rates have started to come back down. This has offered hope to buyers dealing with affordability challenges. Mark Fleming, Chief Economist at First American, explains how they may continue to drop:

“Mortgage rates have already retreated from recent peaks near 8 percent and may fall further . . .”

Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says:

“For home buyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market.”

The Supply of Homes for Sale May Grow

As rates ease, activity in the housing market should pick up because more buyers and sellers who had been holding off will jump back into action. If more sellers list, the supply of homes for sale will grow – a trend we’ve already started to see this year. Lisa Sturtevant, Chief Economist at Bright MLS, says:

“Supply will loosen up in 2024. Even homeowners who have been characterized as being ‘locked in’ to low rates will increasingly find that changing family and financial circumstances will lead to more moves and more new listings over the course of the year, particularly as rates move closer to 6.5%.”

Home Price Growth Should Moderate

And mortgage rates pulling back isn’t the only positive sign for affordability. Home price growth is expected to moderate too, as inventory improves but is still low overall. As the Home Price Expectation Survey (HPES) from Fannie Mae, a survey of over 100 economists, investment strategists, and housing market analysts, says:

“On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively.” 

To wrap it up, experts project 2024 will be a better year for the housing market. So, if you’re thinking about making a move next year, know that early signs show we’re turning a corner. As Mike Simonsen, President and Founder of Altos Research, puts it:

“We’re going into 2024 with slight home-price gains, somewhat easing inventory constraints, slightly increasing transaction volume . . . All in all, things are looking up for the U.S. housing market in 2024.”

Bottom Line

Experts are optimistic about what 2024 holds for the housing market. If you’re looking to buy or sell a home in the new year, the best way to ensure you’re up to date on the latest forecasts is to partner with a trusted real estate agent. Let’s connect.

The Surprising Trend in the Number of Homes Coming onto the Market in Prescott Valley, Arizona

The Surprising Trend in the Number of Homes Coming onto the Market

If you’re thinking about moving, it’s important to know what’s happening in the housing market. Here’s an update on the supply of homes currently for sale. Whether you’re buying or selling, the number of homes in your area is something you should pay attention to.

In the housing market, there are regular patterns that happen every year, called seasonality. Spring is the peak homebuying season and also when the most homes are typically listed for sale (homes coming onto the market are known in the industry as new listings). In the second half of each year, the number of new listings typically decreases as the pace of sales slows down.

The graph below uses data from Realtor.com to provide a visual of this seasonality. It shows how this year (the black line) is breaking from the norm (see graph below):

Looking at this graph, three things become clear:

  • 2017-2019 (the blue and gray lines) follow the same general pattern. These years were very typical in the housing market and their lines on the graph show normal, seasonal trends.
  • Starting in 2020, the data broke from the normal trend. The big drop down in 2020 (the orange line) signals when the pandemic hit and many sellers paused their plans to move. 2021 (the green line) and 2022 (the red line) follow the normal trend a bit more, but still are abnormal in their own ways.
  • This year (the black line) is truly unique. The steep drop off in new listings that usually occurs this time of year hasn’t happened. If 2023 followed the norm, the line representing this year would look more like the dotted black line. Instead, what’s happening is the number of new listings is stabilizing. And, there are even more new listings coming to the market this year compared to the same time last year.

What Does This Mean for You?

  • For buyers, new listings stabilizing is a positive sign. It means you have a more steady stream of options coming onto the market and more choices for your next home than you would have at the same time last year. This opens up possibilities and allows you to explore a variety of homes that suit your needs.
  • For sellers, while new listings are breaking seasonal norms, inventory is still well below where it was before the pandemic. If you look again at the graph, you’ll see the black line for this year is still lower than normal, meaning inventory isn’t going up dramatically and prices aren’t heading for a crash. And with less competition from other sellers than you’d see in a more typical year, your house has a better chance to be in the spotlight and attract eager buyers.

Bottom Line

Whether you’re on the hunt for your next home or thinking of selling, now might just be the perfect time to make your move. If you have questions or concerns about the availability of homes in our local area, let’s connect.

The Perfect Home Could Be the One You Perfect After Buying in Scottsdale, Arizona

The Perfect Home Could Be the One You Perfect After Buying

There’s no denying mortgage rates and home prices are higher now than they were last year and that’s impacting what you can afford. At the same time, there are still fewer homes available for sale than the norm. These are two of the biggest hurdles buyers are facing today. But there are ways to overcome these things and still make your dream of homeownership a reality.

As you set out to make a purchase this season, you’ll want to be strategic. This includes taking a close look at your wish list and considering what features you really need in your next home versus which ones are nice-to-have. This will help you avoid overextending your budget or limiting your pool of options too much because you’re searching for that perfect home.

Danielle Hale, Chief Economist at Realtor.com, explains:

“The key to making a good decision in this challenging housing market is to be laser focused on what you need now and in the years ahead, . . . Another key point is to avoid stretching your budget, as tempting as it may be . . .”

To help identify what you truly need, make a list of all the features you’ll want to see. From there, work to break those features into categories. Here’s a great way to organize your list:

  • Must-Haves – If a house doesn’t have these features, it won’t work for you and your lifestyle (examples: distance from work or loved ones, number of bedrooms/bathrooms, etc.).
  • Nice-To-Haves – These are features you’d love to have but can live without. Nice-to-haves aren’t dealbreakers, but if you find a home that hits all the must-haves and some of these, it’s a contender (examples: a second home office, a garage, etc.).
  • Dream State – This is where you can really think big. Again, these aren’t features you’ll need, but if you find a home in your budget that has all the must-haves, most of the nice-to-haves, and any of these, it’s a clear winner (examples: a pool, multiple walk-in closets, etc.).

If you’re only willing to tour homes that have all of your dream features, you may be cutting down your options too much and making it harder on yourself (and your budget) than necessary.

While you’d love to have granite countertops or a pool in the backyard, those are both things you could potentially add after you move. Instead, it may be best to focus on finding the things that you can’t change (like location or a certain number of rooms). Then, you can upgrade or add some of the other features or finishes you want later on.

Sometimes the perfect home is the one you perfect after buying it.

Once you’ve categorized your list in a way that works for you, discuss your top priorities with your real estate agent. They’ll be able to help you refine the list further, coach you through the best way to stick to it, and find a home in your area that meets your top needs.

Bottom Line

With the current affordability challenges and limited housing supply, you’ll want to be strategic so you can find a home that meets your needs while staying within your budget. Let’s connect to make that possible.

How To Turn Homeownership into a Side Hustle in Prescott, Arizona

How To Turn Homeownership into a Side Hustle

Does the rising cost of just about everything these days make your dream of owning your own home feel less within reach? According to Bankrate, many people are seeking additional income through side hustles, possibly to cope with those increasing expenses and save for a home. This trend is particularly popular with younger individuals who may be dealing with student loan debt (see graph below):

Here are two strategies that can not only make homeownership more affordable in the short term, but turn it into a lucrative side hustle that can pay off down the road.

Transforming the Challenge of a Fixer-Upper into an Opportunity

One thing you could do to help you break into homeownership is consider purchasing a fixer-upper. That’s a home that may be a bit less appealing and as a result has lingered on the market longer than normal. According to a recent article from U.S. News:

“The current state of the housing market may have you expanding your options to try to find a home that you can afford. A fixer-upper that needs some updating and a little love can feel like a welcome alternative to move-in ready houses that go off the market before you can even take a tour.”

By opting for a home that requires some work, you may see two big benefits. For starters, you may find it’s easier to find a home because you’re not looking for that perfect option. Plus, it may also help you enter the housing market at a lower price point. This strategy provides a more affordable way to become a homeowner while also offering the potential for future profits.

Yes, the home may need a little elbow grease, but investing time and effort into gradually enhancing your house not only makes it a home but also increases its future market value. So, while you enjoy the satisfaction of turning a house into a home, you’re also building equity that can be unlocked when it’s time to sell.

Renting Out a Portion of Your Home To Make It More Affordable

Another savvy strategy is to purchase a home with the upfront intention of renting out a portion of it. According to a recent press release from Zillow, renting out a part of their home is already very important for most young homebuyers (see graph below):

This approach serves a strong purpose. As Manny Garcia, Senior Population Scientist at Zillow, says:

“For those first-time buyers navigating the ‘side hustle culture,’ where a regular 9-to-5 might not quite cut it for homeownership dreams, rental income can step in to help . . .”

Basically, it can help you afford your monthly mortgage payments. So if you’re open to it, renting out a portion of your home not only helps with affordability, but it also positions you as an investor and turns your home into a source of income.

Bottom Line

In the face of today’s affordability challenges, both of these strategies offer more attainable paths to homeownership, especially for younger buyers. If you want to discuss these options and see how they might play out for you in our local market, let’s connect.

When You Sell Your House in Prescott Valley, Arizona, Where Do You Plan To Go?

When You Sell Your House, Where Do You Plan To Go?

If you’re thinking about selling your house, you may have heard the supply of homes for sale is still low, and that means your house should stand out to buyers who are craving more options. But you may also be wondering, once you sell, how does the current supply impact your own move? And, will you be able to find a home you want to buy with inventory this low?

One thing that can help you find your next home is exploring all your options, including both homes that have been lived in before as well as newly built ones. Let’s look at the benefits of each one.

The Pros of Newly Built Homes

First, let’s look at the advantages of purchasing a newly constructed home. With a brand-new home, you’ll be able to:

  1. Create your perfect home. If you build a home from the ground up, you’ll have the option to select the custom features you want, including appliances, finishes, landscaping, layout, and more.
  2. Cash-in on energy efficiency. When building a home, you can choose energy-efficient options to help lower your utility costs and reduce your carbon footprint.
  3. Minimize the need for repairs. Many builders offer a warranty, so you’ll have peace of mind on unlikely repairs. Plus, you won’t have as many little projects to tackle.
  4. Have brand new everything. Another perk of a new home is that nothing in the house is used. It’s all brand new and uniquely yours from day one.

The Pros of Existing Homes

Now, let’s compare that to the perks that come with buying an existing home. With a pre-existing home, you can:

  1. Explore a wider variety of home styles and floorplans. With decades of homes to choose from, you’ll have a broader range of floorplans and designs available.
  2. Join an established neighborhood. Existing homes give you the option to get to know the neighborhood, community, or traffic patterns before you commit.
  3. Enjoy mature trees and landscaping. Established neighborhoods also have more developed landscaping and trees, which can give you additional privacy and curb appeal.
  4. Appreciate that lived-in charm. The character of older homes is hard to reproduce. If you value timeless craftsmanship or design elements, you may prefer an existing home.

The choice is yours. When you start your search for the perfect home, remember that you can go either route – you just need to decide which features and benefits are most important to you. As an article from The Mortgage Reports says:

“When building, you gain more freedom to tailor the design, materials, and features, but it demands more time and involvement. Conversely, buying an established home offers immediate occupancy . . . yet may require compromises. Your choice should align with your budget, timeline, customization preferences, and the local real estate landscape.”

Either way, working with a local real estate agent throughout the process is mission-critical to your success. They’ll help you explore all of your options based on what matters most to you in your next home. Together, you can find the home that’s right for you.

Bottom Line

If you have questions about the options in our area, let’s discuss what’s available and what’s right for you. That way you’ll be ready to make your next move with confidence.

How To Turn Homeownership into a Side Hustle in Scottsdale, Arizona

How To Turn Homeownership into a Side Hustle

Does the rising cost of just about everything these days make your dream of owning your own home feel less within reach? According to Bankrate, many people are seeking additional income through side hustles, possibly to cope with those increasing expenses and save for a home. This trend is particularly popular with younger individuals who may be dealing with student loan debt (see graph below):

Here are two strategies that can not only make homeownership more affordable in the short term, but turn it into a lucrative side hustle that can pay off down the road.

Transforming the Challenge of a Fixer-Upper into an Opportunity

One thing you could do to help you break into homeownership is consider purchasing a fixer-upper. That’s a home that may be a bit less appealing and as a result has lingered on the market longer than normal. According to a recent article from U.S. News:

“The current state of the housing market may have you expanding your options to try to find a home that you can afford. A fixer-upper that needs some updating and a little love can feel like a welcome alternative to move-in ready houses that go off the market before you can even take a tour.”

By opting for a home that requires some work, you may see two big benefits. For starters, you may find it’s easier to find a home because you’re not looking for that perfect option. Plus, it may also help you enter the housing market at a lower price point. This strategy provides a more affordable way to become a homeowner while also offering the potential for future profits.

Yes, the home may need a little elbow grease, but investing time and effort into gradually enhancing your house not only makes it a home but also increases its future market value. So, while you enjoy the satisfaction of turning a house into a home, you’re also building equity that can be unlocked when it’s time to sell.

Renting Out a Portion of Your Home To Make It More Affordable

Another savvy strategy is to purchase a home with the upfront intention of renting out a portion of it. According to a recent press release from Zillow, renting out a part of their home is already very important for most young homebuyers (see graph below):

This approach serves a strong purpose. As Manny Garcia, Senior Population Scientist at Zillow, says:

“For those first-time buyers navigating the ‘side hustle culture,’ where a regular 9-to-5 might not quite cut it for homeownership dreams, rental income can step in to help . . .”

Basically, it can help you afford your monthly mortgage payments. So if you’re open to it, renting out a portion of your home not only helps with affordability, but it also positions you as an investor and turns your home into a source of income.

Bottom Line

In the face of today’s affordability challenges, both of these strategies offer more attainable paths to homeownership, especially for younger buyers. If you want to discuss these options and see how they might play out for you in our local market, let’s connect.

Experts Project Home Prices Will Rise over the Next 5 Years in Phoenix, Arizona

Experts Project Home Prices Will Rise over the Next 5 Years

Even with so much data showing home prices are actually rising in most of the country, there are still a lot of people who worry there will be another price crash in the immediate future. In fact, a recent survey from Fannie Mae shows that 23% of consumers think prices will fall over the next 12 months. That’s nearly one in four people who are dealing with that fear – maybe you’re one of them.

To help ease that concern, here’s what the experts say will happen with home prices not just next year, but over the next five years.

Experts Project Ongoing Appreciation

While seeing a small handful of expert opinions may not be enough to change your mind, hopefully, a larger group of experts will reassure you. Here’s that larger group.

The Home Price Expectation Survey (HPES) from Pulsenomics is a great resource to show what experts forecast for home prices over a five-year period. It includes projections from over 100 economists, investment strategists, and housing market analysts. And the results from the latest quarterly release show home prices are expected to go up every year through 2027 (see graph below):

And while the projected increase in 2024 isn’t as large as 2023, remember home price appreciation is cumulative. In other words, if these experts are correct after your home’s value rises by 3.32% this year, it should go up by another 2.17% next year.

If you’re worried home prices are going to fall, here’s the big takeaway. Even though prices vary by local area, experts project they’ll continue to rise across the country for years to come at a pace that’s more normal for the market.

What Does This Mean for You?

If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using the expert projections from the HPES. Check out the graph below:

In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

Bottom Line

If you’re someone who’s worried home prices are going to fall, rest assured a lot of experts say it’s just the opposite – nationally, home prices will continue to climb not just next year, but for years to come. If you have any questions or concerns about what’s next for home prices in our local area, let’s connect.

Home Prices Still Growing – Just at a More Normal Pace in Prescott, Arizona

Home Prices Still Growing – Just at a More Normal Pace

If you’re feeling a bit muddy on what’s happening with home prices, that’s no surprise. Some people are still saying prices are falling, even though data proves otherwise. Part of that misconception is because people are getting their information from unreliable sources. But it’s also coming from some media coverage misrepresenting what the data really shows.

So, to keep things simple, here’s what you really need to know using real data you can trust.

Normal Home Price Seasonality Explained

In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach.

Home prices follow along with seasonality because prices appreciate most when something is in high demand. That’s why there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show the typical percent change for monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):

As the data shows, at the beginning of the year, home prices grow, but not as much as they do when entering the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, prices still grow, just at a slower pace as activity eases again.

This Year, Seasonality Has Returned

Now, let’s look at how this year compares to that long-term trend (see graph below):

 

Here’s the latest data for this year from that same source. Just like before, the dark bars are the long-standing trend. The green bars represent what’s happened this year. As you can see, the green bars are beginning to fall in line with what’s normal for the market. That’s a good thing because it’s more sustainable price growth than we’ve seen in recent years.

In a nutshell, nationally prices aren’t falling, it’s just that price growth is beginning to normalize. Moving forward, there’s a chance the media will misrepresent this slowing of home price growth as prices falling. So don’t believe everything you see in the headlines. The data included here gives you the context you need to really understand what’s happening. So, if you see something in the headlines that’s confusing, don’t just take it at face value. Ask a trusted real estate professional for more information.

Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.

Bottom Line

Home price appreciation is returning to normal seasonality and that’s a good thing. If you have questions about what’s happening with prices in our local area, let’s connect.

People Are Still Moving, Even with Today’s Affordability Challenges in Prescott, Arizona

People Are Still Moving, Even with Today’s Affordability Challenges

If you’re thinking about buying or selling a home, you might have heard that it’s tough right now because mortgage rates are higher than they’ve been over the past few years, and home prices are rising. That much is true. Take a look at the graph below. It breaks down how the current affordability situation stacks up to recent years.

The National Association of Realtors (NAR) explains how to read the values on the graph:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.”

The black dotted line represents that 100 value on the index. Essentially, the higher the bar, the more affordable homes are. As you can see, the orange bar for today shows higher mortgage rates and home prices have created a clear challenge. But, while affordability is definitely tighter right now, that doesn’t mean the housing market is at a standstill.

According to NAR, based on the pace of sales right now, just under 4 million homes will sell this year. With some simple math, let’s break down what that really means for you:

  • 3.96 million homes divided by 365 days in a year = 10,849 houses sell each day
  • 10,849 divided by 24 hours in a day = 452 houses sell per hour
  • 452 divided by 60 minutes in an hour = about 8 houses sell each minute

So, on average, over 10,000 homes sell each day in this country. Whether you’re a buyer or a seller, this goes to show there are still ways to make your move possible, even at a time when affordability is tight.

An Agent Can Help You Make Your Move a Reality

You may be wondering how other homebuyers and sellers are making this happen now. One of the biggest game-changers in today’s market is working with a trusted local real estate agent. Great agents are helping other people just like you navigate today’s market and the current affordability situation, and their insight is invaluable right now.

True professionals will be able to offer advice tailored to your specific wants, needs, budget, and more. Not to mention, they’ll also be able to draw on their experience of what’s working for other buyers and sellers right now. This could mean broadening your search, if needed, to include other housing types like condos, townhouses, or neighborhoods a bit further out to help offset some of the affordability challenges today.

Bottom Line

You might think there aren’t many people buying or selling homes right now since affordability is tighter than it’s been in quite some time, but that’s not the case. It’s true that buying a home has become more expensive over the past couple of years, but people are still moving.

 

If you’re hoping to buy or sell a home today, know that other people are still making their goals a reality – and that’s happening in large part because of the help and advice of skilled local real estate agents. Want to talk to a trusted professional about your own move? Let’s connect.

The Latest 2024 Housing Market Forecast

The Latest 2024 Housing Market Forecast

The new year is right around the corner, and you might be wondering if 2024 will be the right time to buy or sell a home. If you want to make the most informed decision possible, it’s important to know what the experts have to say about what’s ahead for the housing market. Spoiler alert: the projections may be better than you think. Here’s why.

Experts Forecast Ongoing Home Price Appreciation

Take a look at the latest home price forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR):

As you can see in the orange bars on the left, on average, experts forecast prices will end this year up about 2.8% overall, and increase by another 1.5% by the end of 2024. That’s big news, considering so many people thought prices would crash this year. The truth is, prices didn’t come tumbling way down in 2023, and that’s because there just weren’t enough homes for sale compared to the number of people who wanted or needed to buy them, and that inventory crunch is still very real. This is the general rule of supply and demand, and it continues to put upward pressure on prices as we move into the new year.

Looking forward, experts project home prices will continue to rise next year, but not quite as much as they did this year. Even though the expected rise in 2024 isn’t as big as in 2023, it’s important to understand home price appreciation is cumulative. In simpler terms, this means if the experts are right, according to the national average, after your home’s value goes up by 2.8% this year, it should go up by another 1.5% next year. That ongoing price growth is a big part of why owning a home can be a smart decision in the long run.

Projections Show Sales Should Increase Slightly Next Year

While 2023 hasn’t seen a lot of home sales relative to more normal years in the housing market, experts are forecasting a bit more activity next year. Here’s what those same three organizations project for the rest of this year, and in 2024 (see graph below):

 

While expectations are for just a slight uptick in total sales, improved activity next year is a good thing for the housing market, and for buyers and sellers like you. As people continue to move, that opens up options for hopeful buyers who are looking for a home.

So, what do these forecasts show? The housing market is expected to be more active in 2024. That may be in part because there will always be people who need to move. People will get new jobs, have children, get married or divorced – these and other major life changes lead people to move regardless of housing market conditions. That will remain true next year, and for years to come. And if mortgage rates come down, we’ll see even more activity in the housing market.

Bottom Line

If you’re thinking about buying or selling, it’s important to know what the experts are forecasting for the future of the housing market. When you’re in the know about what’s ahead, you can make the most informed decision possible. Let’s chat about the latest forecasts together, and craft a plan for your next move.