Though we might be starting the year in the right direction. We’ve still got tons of issues with the Housing Market.
2024 is starting off to be a busy year in the real estate market. We are starting the year off with lower rates, a dovish FED, a mindset shift about real estate, affordability improving, data coming in much cooler than 2023, and conversations are much more positive. The biggest issues we continue to face are low inventory, affordability, and interest rates are still taking too long to get into the 5’s.
2022 and 2023 saw total home sales under 5MM and 2024 seems to be on the same path. Low home sales and low refinance activity, realtors, loan officers, and the rest of the folks in the residential real estate business have been feeling the pain.
While most of the economy is still holding up well and plugging along, folks in the real estate business have been seeing business down from 30% to 80%, and some, don’t see the light at the end of the tunnel.
2023 was the toughest year ever for most and they are feeling more hopeful for 2024.
Issues with the Housing Market
As we start to roll fast into 2024 we are not seeing the inventory rise as much as we hoped. The rates dropping in late 2023 have helped buyers, homeowners and the rest of us in the industry see more activity which is a good thing. As more buyers enter the market and rates continue to slowly fall this will continue to cause challenges for home buyers and home sellers.
San Diego is already seeing lots of traffic through open houses, bidding wars, cash offers, over asking, 10+ offers on houses, affordability challenges, and the list goes on and rates are only in the 6’s. The buyers who are on the sideline for any reason and wait longer to buy a house will most likely encounter many more challenges when it comes to buying a home this year.
We don’t expect inventory to outweigh the buyer demand and keep in mind most sellers are buyers as well and they need to find a new home. Most folks in the industry will continue to struggle and few will continue to thrive in this environment.
Nationally and locally most markets will have a lack of inventory due to the lock-in effect of 2, 3, and 4% interest rates of current homeowners that don’t see any benefit in moving.
There is no easy path out of this situation and so many markets will see lower sales, higher prices, and a very competitive market.
How can Buyers WIN in this market?
How a buyer wins their offer and beats the competition is going to be the biggest challenge again for 2024.
Working with the right team; agent and loan officer helps. Getting pre-approved upfront, removing contingencies if you can on offers, offering a good price, closing in 10 to 15 days, short contingency periods, having your agent and lender on the same page, having your loan officer calling the listing agent, and providing confidence you can close.
One last final tip, find out if there are any pain points or what the seller is looking for in an offer or maybe needs more time to get out of the house. Addressing the seller’s needs can go a long way to winning an offer. All these have worked for my clients in winning offers over the competition.
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