The Changing Tides of Real Estate: What To Expect in 2024

Here’s what’s in store for the real estate market in the coming year.

When it comes to real estate, making informed decisions is paramount. We've been diligently gathering data and insights to give you a glimpse of what the market might look like in the next year or two. Let's dive right into it.

In 2020, we saw approximately 5.6 million real estate transactions. The following year, 2021, saw a slight increase to 6.1 million transactions. However, 2022 brought a dip to 5.1 million, and as of now, our estimates suggest a further drop to 4.3 million. This indicates a trend of decreasing inventory, which has significant implications for buyers and sellers alike.

Interest rates have been on a rollercoaster ride. In 2020, they stood at 3.7%, but by 2021, they dropped to 2.6%. In 2022, there was a slight bump to 3.2%, and this year, they are expected to end at about 7.23%. This substantial increase in interest rates has garnered attention, leaving many wondering about the future of the real estate market.

Looking ahead to 2024, we anticipate a decrease in transactions to 4.8 million with an interest rate estimate of 5%. The market seems poised for a slowdown. However, in 2025, we may see a modest uptick to 5.3 million transactions with an interest rate of 4.5%.

"In the ever-evolving real estate market, staying informed is key to making wise decisions."

If you've been considering buying a property, our recommendation is to act sooner rather than later. Yes, interest rates are currently high, but the expectation is that they will gradually decrease over the next two to three years. When that happens, you can consider refinancing, potentially reducing your monthly payments.

Let's take an example: if you buy a home for $1.5 million with a 20% down payment, today, your monthly payment would be around $9,500. If you wait for interest rates to drop to 4.5%, your monthly payment could be as low as $7,500. By acting now, you could save approximately $24,000 in the long run. Plus, if the market continues to grow at a minimum of 3% year over year, you stand to make a substantial profit, potentially up to $67,000.

If you're thinking about selling your current property, we recommend doing so only if a major life event is on the horizon. For instance, if you plan to expand your family and need a larger home, this might be the right time to make that move. Similarly, if you're contemplating a move to another state, this could be an opportune moment to put your property on the market. Keep in mind that as interest rates in other states start to rise, the appeal of your current home may increase.

If you have questions or need advice on this or any related real estate matter, don't hesitate to give us a call. We're here to help you navigate the dynamic world of real estate with confidence.