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Weekly Housing Market Trends: What’s Happening in 2025?

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Are you trying to figure out what's happening with home prices, how many houses are up for sale, and how quickly they're selling? Well, you're in the right place. This Weekly Housing Market Trends and Forecast offers a concise update: as of late January 2025, median listing prices have generally declined by -0.5% year-over-year, new listings are up significantly by 9.3%, active inventory has increased by 26.1%, and homes are spending 3 days longer on the market compared to last year. Overall, it's a mixed bag, but there are definitely opportunities for both buyers and sellers to navigate this changing market.

Weekly Housing Market Trends: What's Happening in 2025?

Navigating the housing market can feel like trying to predict the weather – one minute it's sunny, and the next it's raining (mortgage rates!). But don't worry, I am here to break down the latest trends in the housing market with data released by Realtor.com. I'll cover what these trends mean for you, whether you're looking to buy your first home, sell your current one, or just keep an eye on the real estate world.

What's Been Happening Lately? An Overview

Let's start with a quick summary of the key trends I am seeing in the housing market right now:

  • Home prices: Generally flat or declining compared to last year.
  • New listings: Significantly up, giving buyers more choices.
  • Inventory: Much higher than last year, meaning more homes are available.
  • Time on market: Homes are sitting on the market a bit longer, but the gap is narrowing.

These are the highlights, but let's dig a little deeper to see what's really going on.

Breaking Down the Numbers: Key Trends in Detail

Let's dive into the four key areas that are shaping the housing market right now.

1. Home Prices: Are They Finally Coming Down?

One of the biggest questions on everyone's mind is: are home prices finally dropping? For the past 35 weeks, the national median home listing price has been either flat or decreasing compared to the same time last year. That's a pretty long stretch! As of the week ending January 25, 2025, the median listing price fell by -0.5% year-over-year.

But here's where it gets interesting. A lot of the decline we're seeing is because there are more smaller, less expensive homes on the market. When you look at the median listing price per square foot (which takes the size of the home into account), it's actually up 1.3% compared to last year.

Even though prices per square foot are still up, the rate of increase has slowed down since May 2024. This could mean that even though smaller homes are available, softening price growth means that when mortgage rates do decline below current levels, homes become more affordable relative to last year. It’s a signal that the market might be stabilizing.

What does this mean for you?

  • Buyers: There are more affordable homes available, especially smaller ones. If you're willing to downsize or consider a smaller property, you might find a good deal. And softening price growth means that when mortgage rates do decline below current levels, homes become more affordable relative to last year.
  • Sellers: You need to be realistic about pricing. Don't expect to get the same prices that homes were fetching a year or two ago. Consider making your home more attractive to buyers by making necessary repairs and upgrades.

2. New Listings: A Breath of Fresh Air for Buyers?

For months, one of the biggest problems in the housing market has been a lack of homes for sale. But that's starting to change! New listings – the number of sellers putting their homes on the market – increased by 9.3% compared to last year for the week ending January 25, 2025. In fact, the final three weeks of January saw double-digit increases in new listings.

Why is this happening? There are a couple of possibilities:

  • Sellers who were waiting for lower mortgage rates: When mortgage rates dipped slightly in the fall of 2024, some sellers may have decided it was time to list their homes.
  • The “lock-in effect” is easing: Many homeowners have been hesitant to sell because they're locked into low mortgage rates. But life happens, and sometimes people need to move regardless of interest rates.
  • People adapting to life changes: Some buyers are needing to finally adapt to life changes.

What does this mean for you?

  • Buyers: You have more choices than you did a few months ago. Take advantage of this by carefully researching different neighborhoods and homes to find the best fit for your needs and budget.
  • Sellers: You'll face more competition. To stand out, make sure your home is in tip-top shape and priced competitively.

3. Inventory: More Homes on the Market Than Last Year

Not only are more homes being listed, but the overall inventory of homes for sale is also up significantly. For the 64th week in a row, there are more homes for sale than there were at the same time last year. As of January 25, 2025, active listings were up a whopping 26.1% compared to last year. This is a good sign that the market may be starting to cool down.

What does this mean for you?

  • Buyers: You have more leverage. With more homes to choose from, you're in a better position to negotiate price and terms.
  • Sellers: It's more important than ever to make your home stand out. Pay attention to curb appeal, make necessary repairs, and stage your home to appeal to the broadest range of buyers.

4. Time on Market: Are Homes Selling Faster or Slower?

For months, homes have been sitting on the market longer than they were last year. As of January 25, 2025, homes were spending 3 days longer on the market compared to the same time last year. This is the 40th consecutive week that homes have taken longer to sell.

However, there's a glimmer of hope. The gap in time on market has been shrinking since November. This suggests that while inventory is up, buyer demand is also holding steady.

What does this mean for you?

  • Buyers: You have a little more time to make a decision, but don't wait too long. If you find a home you love, it's still important to act quickly.
  • Sellers: Be patient. It might take a little longer to sell your home than it would have a year or two ago. Don't be afraid to adjust your price if you're not getting offers.

Data Summary: A Quick Look at the Numbers

Here's a table summarizing the key data points as of January 2025:

Metric Year-over-Year Change
Median Listing Prices -0.5%
New Listings +9.3%
Active Listings +26.1%
Time on Market +3 days

My Thoughts and Predictions

Based on these trends, here's what I think we can expect to see in the housing market in the coming weeks and months:

  • Prices will likely remain relatively stable: I don't expect to see huge price drops, but I also don't think prices will start rising dramatically anytime soon.
  • Inventory will continue to increase: As more sellers enter the market, buyers will have even more choices.
  • Mortgage rates will be a key factor: If mortgage rates stay high, the market will likely remain sluggish. But if rates start to come down, we could see a surge in buyer demand.
  • The market will vary by location: Some areas will be hotter than others. It's important to pay attention to what's happening in your local market.

Overall, I think the housing market is in a period of transition. It's not as crazy as it was a year or two ago, but it's not a buyer's market either. It's a more balanced market, where both buyers and sellers need to be smart and strategic.

Tips for Buyers and Sellers

No matter which side of the transaction you're on, here are some tips to help you navigate the current housing market:

For Buyers:

  • Get pre-approved for a mortgage: This will show sellers that you're a serious buyer.
  • Work with a good real estate agent: A knowledgeable agent can help you find the right home and negotiate a fair price.
  • Be patient: Don't feel pressured to buy the first home you see. Take your time and find the right fit.
  • Don't be afraid to negotiate: With more homes on the market, you have more leverage to negotiate price and terms.

For Sellers:

  • Price your home competitively: Don't overprice your home. Work with your agent to determine a fair market value.
  • Make necessary repairs: Fix any obvious problems before you list your home.
  • Stage your home: Make your home look as attractive as possible to potential buyers.
  • Be flexible: Be willing to negotiate with buyers.

The Bottom Line

The housing market is always changing, and it can be tough to keep up with the latest trends. But by staying informed and working with experienced professionals, you can successfully navigate the market, whether you're buying or selling.

I hope this article has been helpful. Happy house hunting (or selling)!

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Is the Housing Market on the Brink of a Crash or Boom in 2025?

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The housing market is a hot topic right now, and for good reason. If you're like me, you're probably wondering whether we're about to see a major crash or if the market will keep booming. The short answer is: neither a dramatic crash nor a huge boom is likely in the immediate future. Data suggests a more moderate path, with some areas seeing price increases while others might experience minor dips. Now, let's dive deeper into what’s really going on and what you might expect.

Is the Housing Market on the Brink of a Crash or Boom in 2025?

It feels like just yesterday we were in the middle of a frantic buying frenzy, with prices soaring and homes flying off the market in days. Now, things are a bit different. I've been watching the market closely, and it's clear that the rapid growth we saw a couple of years back is cooling down. But is cooling down the same as a crash? I don't think so, and here is why.

What the Numbers Say

Let’s look at the latest data from credible sources. It is important to understand how the market is performing based on facts and not just speculations.

  • Federal Housing Finance Agency (FHFA) House Price Index: According to their report, U.S. house prices increased by 4.3 percent between the third quarter of 2023 and the third quarter of 2024. That might sound like a lot, but when you compare it to the huge jumps of previous years, it’s a definite slowdown. Also, they noted that house prices were up 0.7 percent compared to the second quarter of 2024, indicating that the growth is not uniform throughout the year and has significantly slowed down.
    Time Period Price Change
    Q3 2023 – Q3 2024 4.3%
    Q2 2024 – Q3 2024 0.7%
  • National Association of Realtors (NAR): In November 2024, existing-home sales climbed 4.8% compared to October and a significant 6.1% from a year earlier. The median existing-home price was $406,100, which is a 4.7% increase from November 2023. This means that while prices are still going up, the pace of the increase is not as fast as before, and sales are picking up.
    Metric Nov 2024 Change from Oct 2024 Change from Nov 2023
    Existing-Home Sales (Annualized Rate) 4.15 million +4.8% +6.1%
    Median Existing-Home Price $406,100 – +4.7%
    Unsold Inventory (Months' Supply) 3.8 -2.9% +8.6%
  • CoreLogic: They report that, through October 2024, national home prices increased by 3.4% compared to October 2023. They also anticipate a 2.4% year-over-year increase from October 2024 to October 2025. This again indicates a moderate growth, and they predict that prices will reach a new peak by April 2025.
    Time Period Price Change
    Oct 2023 – Oct 2024 3.4%
    Oct 2024 (Forecast) – Oct 2025 (Forecast) 2.4%
    Oct 2024 – Nov 2024 (Forecast) -0.03%

The Housing Market “Boom” Argument

So, why would some people think we're headed for a boom? Here are a few factors that could support that idea:

  • Low Inventory: Even though inventory is up from last year, the overall supply of homes for sale is still relatively low in many areas. This keeps upward pressure on prices.
  • Consistent Demand: Despite higher mortgage rates, there are still plenty of people looking to buy. Factors like job growth and changing life circumstances keep demand going. The National Association of Realtors notes that sales are picking up, with a 4.8% increase in November 2024 compared to the previous month, and a 6.1% increase compared to a year ago.
  • Regional Differences: The housing market isn't monolithic. Areas in the Northeast are still seeing strong price growth. For example, New Jersey, Rhode Island, and New Hampshire had some of the highest year-over-year price gains. The FHFA also reports that the East North Central division had the strongest appreciation with a 6.8% increase from the third quarter of 2023 to the third quarter of 2024.

The Housing Market “Crash” Argument

Now, let's look at the possibility of a crash:

  • Affordability Issues: Rising home prices coupled with higher mortgage rates are making it harder for many people to afford a home. This can put a limit on future price growth.
  • Cooling Demand: While demand is still there, it’s not as frenzied as it once was. We can see this in the CoreLogic report where month-over-month home prices only increased by 0.02% in October 2024 compared with September 2024.
  • Areas at Risk: CoreLogic has identified some metro areas that have a high probability of price decline over the next 12 months including: Provo-Orem, UT, Salt Lake City, UT; Atlanta-Sandy Springs-Rowsell, GA; Tucson, AZ; and Palm Bay-Titusville-Melbourne, FL.

Why I Think It's Neither

After analyzing the data and observing the current market trends, here’s why I believe we're not heading for a crash or boom:

  • Moderate Growth: The data consistently points to a slowing pace of price increases. Prices are still going up, but at a much more sustainable rate than before. CoreLogic’s forecast predicts a 2.4% year-over-year increase from Oct 2024 to Oct 2025 which is a quite moderate number.
  • No Bubble Indicators: A major crash is usually preceded by a speculative bubble. While the market was overheated a couple of years back, that heat is steadily dissipating. Lending standards are also stricter than they were before the 2008 crash.
  • Gradual Shift: I see a gradual shift towards a more balanced market. Sellers aren’t having the same level of power that they had before, and buyers are regaining some leverage.
  • Regional Variations : The fact that some areas are still doing well while others are showing signs of slowdown, confirms that it won't be a uniform boom or crash, but a more localized trend.

My Thoughts on the Future

Personally, I think we’re entering a new phase of the housing market. It's not going to be as crazy as it was a couple of years back, but it won't be a dramatic fall either. Here are some key takeaways:

  • Don’t Expect Big Jumps: If you're hoping for another year of double-digit price increases, you're likely to be disappointed. We’re going to see more moderate, single-digit growth in most areas. The data from FHFA, NAR and CoreLogic corroborates this.
  • Be Smart If You're Buying: This is a good time to buy a home if you are prepared and financially secure. Take your time to compare and find the right property and neighborhood and do your due diligence.
  • Location Matters: The market is not uniform. What's happening in New Jersey may be very different from what's happening in Florida. Pay attention to your local market trends.
  • Consider Long-Term: Housing is generally a good long-term investment. If you're planning to stay put for a while, the current market offers reasonable options.

The Bottom Line

The housing market is definitely changing, but it's not in a state of collapse or explosive growth. Instead, we are seeing a gradual shift towards a more stable and balanced environment. Prices are still rising but at a slower pace, and while demand remains, it is less frantic. It’s essential to stay informed, do your research, and make decisions that align with your individual circumstances and goals. I am optimistic that the housing market will find a stable and sustainable ground for the coming times.

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Turnkey Investment Properties

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Contact us today to expand your real estate portfolio with confidence.

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Housing Market Alert: Top 10 Most Vulnerable Counties Q3 2024

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Are you thinking about buying or selling a home in the coming months? If so, you might want to pay attention to the latest report on the Top 10 Most Vulnerable U.S. Housing Markets in Q3 2024. Based on data from ATTOM, a leading curator of real estate data, several U.S. housing markets are showing signs of vulnerability, primarily in California, New Jersey, Illinois, and Florida. These areas are deemed more susceptible to potential declines in home values and increased foreclosure rates in the third quarter of 2024. Understanding these trends can help you make informed decisions about your real estate investments.

Understanding the Vulnerability Index

ATTOM's Q3 2024 Housing Market Impact Risk Report utilizes various factors to determine the vulnerability of a housing market. These factors include the percentage of homes with underwater mortgages, the ratio of a homeowner's income needed for a mortgage payment, the foreclosure rate, and the local unemployment rate. A higher score in these areas indicates a potentially higher risk of a decline in the housing market.

I've been following the housing market for many years, and these reports are always valuable for understanding where risks lie. In my view, combining factors like affordability, underwater mortgages, foreclosures, and unemployment gives a pretty good indication of whether a particular area is likely to see a slowdown.

From my perspective, the rising interest rates over the past year, and even more recently the increase in unemployment claims, have a lot to do with the current climate. As a result, some homebuyers have become more reluctant to make purchases, and it's showing up in several areas in the country.

How ATTOM Determines the Most Vulnerable Markets

ATTOM's report scrutinizes data across 578 counties nationwide, covering various elements that can impact housing markets. Their approach considers the affordability challenges faced by potential homebuyers and the risk of foreclosures and delinquencies.

I’ve reviewed the ATTOM methodology in the past, and while every system has limitations, I think this one does a good job capturing the bigger picture.

In the report, they look at the overall market, but also consider specific local trends. If a region has a combination of high unemployment, a high percentage of homes underwater, and an increasing number of foreclosures, that becomes a warning sign that this market is susceptible to downward pressure.

Housing Market Alert: Top 10 Most Vulnerable Counties Q3 2024

Based on the ATTOM report, here are the top 10 most vulnerable U.S. housing markets in the third quarter of 2024:

Rank County State % of Income Needed to Buy % of Properties Underwater Foreclosure Filing Rate August 2024 Unemployment Rate
1 Butte CA 5% 7% 1 in 816 3%
2 San Joaquin CA 2% 8% 1 in 921 8%
3 Kings CA 8% 1% 1 in 802 2%
4 Humboldt CA 6% 1% 1 in 642 8%
5 Cumberland NJ 6% 9% 1 in 571 7%
6 Kern CA 5% 7% 1 in 770 7%
7 Atlantic NJ 7% 7% 1 in 766 8%
8 Solano CA 7% 1% 1 in 1,069 7%
9 Lake IN 28% 9% 1 in 608 3%
10 Madera CA 9% 4% 1 in 648 4%

Let's take a closer look at some of the individual counties and why they made the list:

Butte County, CA:

Butte County, located in Northern California, holds the top spot on the list. A combination of affordability issues (only 5% of income needed to buy a home), a moderate number of properties underwater (7%), and a relatively low foreclosure rate (1 in 816 properties) seem to contribute to the vulnerability. The 3% unemployment rate is not exceptionally high, but when combined with the other factors, it's enough to push it to the top of the list.

San Joaquin County, CA:

San Joaquin County, another California county, is in second place. It has a lower percentage of income needed to buy a home (2%) than Butte County, but the unemployment rate of 8% is significantly higher. The foreclosure filing rate isn't overly concerning (1 in 921), but the other risk factors lead to a higher ranking.

Cumberland County, NJ:

New Jersey shows up in the top 10, with Cumberland County at number 5. Cumberland County has the highest percentage of underwater mortgages (9%) out of the counties in the top 10, as well as a high foreclosure rate (1 in 571). In my opinion, these factors play a significant role in its higher risk ranking.

Lake County, IN:

Lake County in Indiana stands out, particularly with its high percentage of income needed for a mortgage payment (28%). This indicates that home affordability is a big problem in this area. Combined with a 9% underwater rate and a foreclosure rate of 1 in 608, the Lake County market also has a higher level of vulnerability.

What These Rankings Mean for Homebuyers and Sellers

The findings of this report can have important implications for homebuyers and sellers. Understanding the risks associated with a particular housing market can help you make more informed decisions.

For Homebuyers:

  • Proceed with caution in high-risk areas. If you're looking to buy in one of the markets on the list, I suggest you proceed with a lot more caution than usual. I'd recommend being more thorough in your research. Consider working with a real estate agent that has experience in that specific market and understand the local trends and potential downsides.
  • Negotiate for favorable terms. You may be able to negotiate for a better price or more favorable loan terms in these markets, as sellers may be more willing to make concessions to get their homes sold.
  • Carefully review your finances. Be sure that you can comfortably afford your monthly mortgage payments, especially if the market does start to decline.

For Home Sellers:

  • Be prepared for a slower selling process. In areas with higher vulnerabilities, it could take longer to find a buyer at a price that you're happy with.
  • Consider lowering your asking price. You might need to adjust your asking price to be more competitive in the current market conditions.
  • Get a pre-inspection. A pre-inspection can help you address any potential problems before you list your home. This can help to reduce the risk of having to make repairs during the sales process, which might scare off buyers.

Factors Beyond the Report

While ATTOM's report provides valuable insights, it's important to consider other factors that could affect the housing market.

I've observed that the economy as a whole tends to play a significant role in local housing markets. The availability of jobs, local industries, and future economic growth will continue to impact housing demand and home values.

Conclusion

The Top 10 Most Vulnerable U.S. Housing Markets in Q3 2024 provide a snapshot of where potential risks may lie. While California and New Jersey continue to dominate the list, Florida and other states have started to show greater vulnerability. Understanding these trends can help you make informed decisions about your real estate investments.

I'd like to emphasize that while these areas are considered more at-risk, it's important to remember that the housing market is dynamic, and localized factors can influence the trajectory of specific neighborhoods and counties.

If you're considering entering the housing market, I highly suggest conducting your own research and understanding the specific conditions within a given community.

Florida Condo Market Faces Crisis With the New Law and Rising Fees

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The Florida condo market is currently experiencing a significant shift, and the short answer is: it's complicated. New legislation, stemming from the tragic Surfside condo collapse, is forcing condo associations to address long-overdue maintenance and repairs. This, in turn, is having a ripple effect on both buyers and sellers.

As someone who has followed this market closely, I can tell you that the changes are substantial and require careful consideration for anyone looking to buy, sell, or currently own a condo in the Sunshine State. So, let's get into the details.

Florida Condo Owners Face Rising Fees: A Market Analysis

According to a recent report by Realtor.com, the heartbreaking collapse of Champlain Towers South in Surfside back in June 2021 is a pivotal moment in Florida's history and has dramatically impacted the state's condo market. The incident, which tragically claimed 98 lives, revealed serious deficiencies in the building's structural integrity and exposed the lack of adequate maintenance and reserve funding. It was a wake-up call, not just for the residents of Surfside but for the entire state.

The tragedy highlighted a crucial issue: many older condo buildings in Florida had not been properly maintained, and the funds needed for critical repairs were not readily available. This led to the creation of Senate Bill 4D in May 2022, a law aimed at preventing similar disasters by ensuring better oversight and financial planning for condo associations. This was not an overreaction; the lives of thousands were at stake.

The New Law: What You Need to Know

The core of the new law is the Structural Integrity Reserve Study (SIRS). Here's what it entails:

  • Who is affected? Condo buildings three stories or higher, particularly those older than 30 years.
  • What's the requirement? Condo associations are now required to conduct a SIRS, detailing the current state of the building's structural elements.
  • What does the SIRS do? It identifies essential repairs and maintenance needs and estimates the costs involved, helping the associations plan for the future.
  • Budget Adjustments: Associations are required to adjust their budget as per the SIRS report.
  • Transparency: The associations are required to share both the SIRS and the revised budgets with all the condo owners within 45 days.
  • Funding: Condo owners must contribute to the reserve funds to ensure long-term repairs can be carried out.
  • Timeline: The associations must submit a spending plan for repairs by December 31st.

The law basically aims to create a system where adequate reserves are set aside to address future repairs and keep the buildings safe.

The Impact on Condo Owners: Rising Costs and Uncertainty

The immediate effect of the new law is that many condo owners are now facing significantly increased costs. Here's a breakdown:

  • Special Assessments: Many associations are imposing special assessments to fund immediate repairs and build up those mandated reserve funds. These can be quite substantial.
  • Increased HOA Fees: Homeowner's association (HOA) fees have, on average, almost doubled since the Surfside tragedy. This is in addition to the assessments and increases the monthly outlay.
  • Insurance Hikes: Homeowners insurance premiums have also risen dramatically as insurance companies have been hiking rates for condo association insurance and collapse coverage.
  • Financial Strain: This combination of increased assessments, HOA fees, and insurance costs is placing a tremendous financial burden on many condo owners, particularly retirees on fixed incomes.

It's a scary situation for many who find themselves facing costs they hadn't budgeted for. There's a lot of concern in the community that some owners might even be forced to sell their properties due to these additional charges.

The Buyer's Perspective: Hesitation and Caution

If you're thinking about buying a condo in Florida right now, you're probably feeling a little cautious, and understandably so. Here's what's on the minds of many prospective buyers:

  • Uncertainty about Costs: It's hard to predict what costs you might inherit with a condo purchase, since you are buying into an existing association. This uncertainty is a big deterrent for some. Buyers are worried they might be buying into a property that will require significant and unexpected expenses.
  • Focus on Single-Family Homes: Some buyers are opting for single-family homes or townhouses, as they seem less likely to be subject to the same level of scrutiny and high fees. This means there are a lot of condos on the market which are not attracting buyers.
  • Scrutiny: Now, as a buyer, you have to ask tough questions: Have the inspections been completed? Are the reserves adequately funded? What are the ongoing expenses? It can feel like a lot to take on.

Essentially, many buyers are taking a “wait and see” approach, which is further impacting the demand for Florida condos.

The Seller's Dilemma: Selling Under Pressure

For condo owners considering selling, it is also a complex situation:

  • Increased Competition: With many owners looking to sell before assessments hit, there's more competition on the market.
  • Potential for Losses: Some owners might need to sell at a loss to avoid rising fees.
  • Transparency and Disclosure: Sellers must now be prepared to provide all necessary documents including SIRS reports and budget information to potential buyers.
  • Title Complications: If the building isn't compliant with the new laws because of unfunded reserves or unmet inspection requirements, sellers may struggle to convey a clear title.

It can be a stressful time to sell, especially when facing rising costs and a market where many buyers are wary.

The Silver Lining: Long-Term Stability and Safety

While the current situation in the Florida condo market is tough, there is also a silver lining. In the long run, the new regulations will lead to better-maintained buildings, increased safety, and more financial stability within condo associations.

Here are some potential positives:

  • Structural Integrity: Buildings will be safer because of thorough inspections and the mandatory repair schedule.
  • More Transparency: Both buyers and owners will now have a clearer understanding of a condo association’s financial situation because of the SIRS and budget reporting.
  • Long-Term Planning: Associations are now mandated to plan ahead and create reserves to handle major future repairs.
  • Ending Uncertainty: Many in the industry feel that by the end of this year, we will have a clearer picture of the financial health of different condo buildings. This will in turn bring more certainty to the market and help buyers.

As Jeff Lichtenstein mentioned, much of the current deterrent for buyers comes from uncertainty about costs. That mystery is starting to end, and with it, the market will find a new equilibrium.

Key Takeaways for Navigating the Florida Condo Market

If you are involved in the Florida condo market, here is some advice based on the current situation:

  • For Buyers:
    • Do your due diligence: Before making an offer, ask about inspection reports, reserve funding, and the status of potential assessments.
    • Consider the Financials Carefully analyze HOA fees, insurance premiums and understand the budget of the association before making any decisions.
    • Think long-term: Be aware that the prices might reflect the current issues in the market, but the potential long-term benefits of a stable, well-maintained building.
    • Consider other options Single-family homes and townhouses might be more attractive options for those who are wary about condo associations, but do consider all the pros and cons.
  • For Sellers:
    • Be transparent: Disclose all information regarding the building's inspection and funding status to any potential buyers.
    • Price Strategically: It may be worth considering pricing competitively to attract buyers, given the current market conditions.
    • Be patient: It might take longer to find the right buyer due to the uncertainty, so you need to be patient.
    • Work with a professional: Partner with experienced Realtors who can help you navigate the current situation effectively and offer strategic advice.
  • For Condo Owners:
    • Understand your building's financial health: Get familiar with the SIRS and the budget, so you can plan ahead for upcoming expenses.
    • Attend association meetings: This is important to understand the status of the building and any upcoming projects.
    • If you are struggling financially: Look into whether there are options like payment plans for special assessments.

Looking Ahead

The changes to the Florida condo market are not temporary; they represent a fundamental shift in how these properties are managed. The new regulations are designed to prevent a tragedy like the Surfside collapse from ever happening again, and, in the long run, they will create a safer and more stable environment for everyone. In the meantime, it is crucial for both buyers and sellers to be prepared for this complex and evolving situation.

The Florida condo market is certainly in a state of flux, but with awareness, caution, and informed decision-making, both buyers and sellers can navigate these changes successfully. It’s going to be a period of adjustment, but in the long term, these changes should contribute to a more sustainable and safer environment for condo living in Florida.

Work with Norada, Your Trusted Source for

Turnkey Investment Properties in Florida Markets

Discover high-quality, ready-to-rent properties designed to deliver consistent returns.

Contact us today to expand your real estate portfolio with confidence.

Contact our investment counselors (No Obligation):

(800) 611-3060

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Insurance Crisis Could Lead to a Worst Crash in the Housing Market

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The looming insurance crisis in the United States could potentially trigger a housing market crash worse than the one experienced in 2008. A recent report from the Senate Budget Committee warns that the increasing frequency and severity of extreme weather events, largely attributed to climate change, are jeopardizing the stability of homeowners' insurance markets (Newsweek).

If insurers retract coverage in areas susceptible to climate risks, the housing market could face dire consequences, leading to significant drops in property values and an inability for many to secure mortgages.

Insurance Crisis Could Lead to a Worst Crash in the Housing Market

Key Takeaways

  • Insurance Market Instability: Homeowners' insurance markets are under threat from climate change.
  • Mortgage Accessibility: Rising insurance premiums may make many properties unmortgageable.
  • Wealth Erosion: A decline in property values could significantly diminish household wealth across the U.S.
  • Systemic Risk: The potential housing market crash could pose a risk to the broader economy, reminiscent of the 2008 financial crisis.
  • Immediate Action Needed: Policymakers must act swiftly to mitigate these risks and protect homeowners.

Understanding the Connection Between Insurance and Housing Markets

The Senate Budget Committee's report highlights a critical issue—the connection between homeowners' insurance and the housing market is stronger than many realize. Since insurance is mostly a requirement for obtaining a mortgage, fluctuations in insurance availability and affordability can lead directly to fluctuations in home buying capabilities.

If insurance companies withdraw coverage from economically vulnerable areas, it leaves homeowners without the necessary protection. Consequently, mortgage lenders are likely to hesitate to finance homes in those regions, leading to a freeze in real estate transactions.

Why Are Insurance Markets So Vulnerable?

The root cause of this impending crisis lies in the escalating effects of climate change. As extreme weather events—hurricanes, wildfires, floods—become more common and severe, insurers find themselves facing larger payouts than previously anticipated. Florida, California, and Louisiana are leading examples of states struggling with skyrocketing homeowners' insurance premiums due to fear of losses from such disasters, with the nonrenewal rates in 2023 reaching 2.99% in Florida and 1.8% in Louisiana, respectively, according to the report by Newsweek. The reality is that as these climate-related risks become more pronounced, insurers might simply opt out of providing coverage in high-risk areas altogether.

The Ripple Effect on Homebuyers

As a consequence of this instability within the insurance market, aspiring homebuyers are finding it increasingly difficult, if not impossible, to secure a mortgage for homes in affected areas. The market already reflects rising prices due to decreased insurance availability combined with high demand. The Senate Budget Committee indicates that the inability to obtain mortgages could lead to lower demand for homes, effectively crashing housing prices.

A Significant Retreat from Insurance Coverage

The report indicates that there has been a uniform retreat from homeowners' insurance across high-risk areas in the past few years, with premium rates soaring amid fewer companies willing to underwrite policies. This decrease in availability is indicative of a larger pattern affecting homeowners as insurance becomes not just expensive but unattainable in many instances.

The Economic Implications of a Housing Crash

The implications of a potential housing crash are vast and alarming. According to the Senate Budget Committee, homes represent the greatest source of wealth for most Americans, meaning that any decline in property values will directly erode household wealth across the nation.

The situation is even more precarious when considering that the decline in asset values could fuel a wider economic downturn, similar to the events witnessed during the 2007-2008 financial crisis. Households that lever long-term financial strategies around their home values could deeply suffer in this kind of downturn.

A former chief economist for Freddie Mac, Sean Becketti, ominously commented on the scenario, stating that predicted declines in property values due to climate-related events could be “greater in total than those experienced in the housing crisis and Great Recession,” although these declines may occur gradually rather than all at once. This slow burn can be more dangerous, embedding the risk into the economy more thoroughly, as opposed to a rapid collapse that allows for quicker recovery.

Lessons from the 2008 Crisis

When reflecting on the 2008 housing crash, it’s essential to acknowledge the differences between that financial collapse and the current challenges posed by climate change. In the past, the financial system and asset values were able to bounce back over time. However, the permanence of climate-related risks raises serious concerns: as properties become increasingly insurable unworthy, they risk suffering from long-term declines in value and burgeoning economic instability. The much slower, insidious nature of climate change means that the repercussions could persist for years or even decades without the opportunity for a clean recovery.

Insurance and Mortgage Accessibility

In many regions, the situation is dire, with rising insurance premiums and limited coverage making it nearly impossible for individuals without significant cash reserves to enter the housing market. The Senate Budget Committee’s report clearly states that the situation could lead us to an economic scenario reminiscent of 2008. If the availability of insurance further stagnates, it’s likely that home values will tumble, pushing household wealth downwards and exacerbating existing financial strains across the board.

Looking Forward: Can We Prevent a Crisis?

The report warns that states currently grappling with insurance instability are merely “canaries in the coal mine”. Other states throughout the nation could soon face similar challenges. The message from the Senate Budget Committee is clear: individuals and policymakers must be prepared for the growing insurability crisis and take proactive measures to address systemic risks before they worsen.

Policymakers need to look beyond the immediate concerns of property and mortgage values and instead consider the long-range implications of climate change on wealth and the overall U.S. economy. As climate events increase in frequency and intensity, so too must our strategies for handling these challenges evolve.

Conclusion

While it is too early to predict the exact timeline or scale of such an event, the findings and warnings provided by the Senate Budget Committee cannot be ignored. The interconnectedness of insurance markets and housing values presents a daunting reality, one that underscores the need for immediate action. Homeowners, potential buyers, and policymakers alike must reclaim agency over this situation before it spirals into a crisis that leaves vast sectors of the population and economy in jeopardy.

Florida Real Estate Market Saw a Post-Hurricane Rebound Last Month

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Alright, let's dive right into the current Florida housing market. The market is showing signs of a shift, with increased listings and inventory, while prices are starting to cool off a bit. This means that for potential buyers who've been waiting on the sidelines, there are more opportunities than before, while for sellers, the market may not be as hot as it once was. Let's break it all down, shall we?

I know how stressful it can be navigating the real estate scene, and whether you're looking to buy, sell, or just keep tabs on the market, it's crucial to stay informed. That's why I'm here to give you the lowdown on what's happening in Florida right now, based on the latest data from Florida Realtors®.

Florida Real Estate Market Saw a Post-Hurricane Rebound Last Month

Home Sales

Let's talk sales numbers. In November 2024, we saw a dip in closed sales compared to the same time last year. Existing single-family home sales totaled 17,095, which is a 3.5% decrease year-over-year. Condo-townhouse sales took a bigger hit, with 6,002 units sold, down a significant 15.6%.

Now, that might sound like a lot, but it’s important to look at the bigger picture. When comparing different sized markets, it's always better to compare percentages rather than absolute sales figures, plus, these numbers can swing quite a bit from month to month.

Here is a summary:

  • Single-Family Homes: 17,095 closed sales, a 3.5% decrease year-over-year
  • Condo-Townhouse Units: 6,002 closed sales, a 15.6% decrease year-over-year

Home Prices

The good news for buyers is that home prices are showing signs of easing. The statewide median sales price for existing single-family homes in November was $410,700, which is a slight 0.6% decrease from the $413,000 we saw a year ago. For condo-townhouse units, the median price dropped more noticeably, down 5.8% to $311,000 from $330,000 in November 2023.

It's important to remember that the median price is simply the midpoint; half the homes sold for more, and half for less. So, while the median price is a useful indicator, it doesn't necessarily reflect the price of all homes. But overall, this decrease in median sales prices does suggest that home values aren't climbing as fast as they were.

Here is a summary:

  • Single-Family Homes: Median price $410,700, down 0.6% year-over-year
  • Condo-Townhouse Units: Median price $311,000, down 5.8% year-over-year
Property Type November 2024 Median Price November 2023 Median Price Percent Change Year-over-Year
Single-Family Homes $410,700 $413,000 -0.6%
Condo-Townhouses $311,000 $330,000 -5.8%

Housing Supply

One of the big stories in the current Florida market is the increase in housing supply. In November, there was a 4.8-month supply of existing single-family homes, which is a substantial 29.7% increase compared to last year. The condo-townhouse market saw an even bigger jump, with an 8.2-month supply, up a whopping 64% year-over-year.

What does this mean? Well, a higher supply means more options for buyers and less pressure from bidding wars, giving them more time to make decisions. As a result, this is a very welcome change for buyers.

Here is a summary:

  • Single-Family Homes: 4.8-month supply, up 29.7% year-over-year
  • Condo-Townhouse Units: 8.2-month supply, up 64% year-over-year

Market Trends

Here's where things get interesting. According to Florida Realtors Chief Economist Dr. Brad O’Connor, November saw a post-hurricane rebound in new listings and new pending sales. We saw a significant 12.6% jump in new pending sales for single-family homes year-over-year, which is a very large jump considering the recent trends. To put it in perspective, this is the most growth we’ve seen since April 2021. The increase in new listings also paints an interesting picture. For existing single-family homes, new listings were up 7.2% year-over-year, while condo-townhouse listings were up 5.4%. This is great news for buyers who have more properties to choose from.

However, O’Connor did caution that this could be a temporary rebound, with October activity shifting into November due to the hurricane. It seems we may need to wait for the December figures to see if there's true momentum.

  • New Pending Sales (Single-Family): Up 12.6% year-over-year (largest increase since April 2021)
  • New Listings (Single-Family): Up 7.2% year-over-year
  • New Listings (Condo-Townhouse): Up 5.4% year-over-year

Is It a Buyer's or Seller's Housing Market?

Now for the million-dollar question: is it a buyer's or a seller's market? Well, it's complicated. Traditionally, a market is considered balanced when there is around a 5.5-month supply of homes. Anything lower than that typically favors sellers, and anything higher favors buyers.

With a 4.8-month supply for single-family homes and a higher 8.2-month supply for condo-townhouses, it's not completely clear-cut. The single-family home market is still leaning slightly towards sellers, but it is moving towards balance. The condo-townhouse market, however, is giving more leverage to buyers. However, with the increased inventory and slight price decrease we are leaning towards a more balanced market, or even one that is slightly favoring buyers especially in the condo-townhouse sector, compared to the previous years. However, it is important to look at individual neighborhoods to get the true picture of supply and demand.

Are Home Prices Dropping?

The short answer is, not drastically, but they are easing. We've seen a small decrease in the median sale price for both single-family homes and condos/townhouses. Single family homes are down by 0.6%, while condo townhouses are down by 5.8%.

While some might be hoping for a huge drop, that's not what we're seeing. The market is adjusting, which is actually a healthy sign. It's not a crash, but more of a leveling off, and an indicator that the rapid price increases of the past few years might be slowing.

Additional Data Points to Consider

It’s not just about supply and prices. There are other metrics that give a complete picture of the housing market:

  • Median Time to Contract: This is the time it takes between a home being listed and a buyer and seller entering an agreement. It now sits at 47 days, which is a 62.1% increase year-over-year, signaling that homes are staying on the market a little bit longer compared to last year.
  • Median Time to Sale: The time between listing and actually closing the sale is now at 90 days. This is up 25% year over year, meaning the entire process from listing to closure has been elongated significantly.
  • Cash Sales: The percentage of closed sales paid fully in cash is 27.5%, down 13% year-over-year. This could indicate a reduction in investor activity.
  • Median Percent of Original List Price Received: Sellers are getting 95.8% of their original listing price. This is a 1.2% decrease year over year. This figure is useful to analyze how much negotiation is happening and whether buyers are getting a better deal on the property, which suggests more bargaining power for buyers than what they had last year.

My Thoughts and Opinions

As someone who’s been watching the Florida market for a while now, I think what we're seeing is a very welcome shift. The rapid appreciation of home values was unsustainable, and a more balanced market will benefit everyone in the long run. The increased inventory is great news for buyers, giving them more choices and less pressure.

I do think the post-hurricane rebound is something to watch. It will be interesting to see how things play out in the December numbers, and whether the momentum we saw in November continues. The market is very much still in transition.

For buyers, my advice would be: Don't rush in with unrealistic expectations. Do your homework. Don't get caught up in bidding wars and make sure to keep your long-term goals in mind. There are great opportunities out there right now but you must do your diligence and be well-informed.

For sellers: It might be time to adjust your expectations. Overpricing your home will likely result in it sitting on the market longer. Work with an experienced realtor who can provide guidance on pricing and strategy.

Conclusion

The current Florida housing market is complex and ever-changing. While we're seeing signs of a shift towards a more balanced market, the situation is still very dynamic. Home prices are easing, supply is up, and sales have cooled off, and I think these changes are great news. But remember, the real estate market is localized, so it's essential to look at what’s happening in your specific area to make the most informed decisions.

The key is to stay informed, work with knowledgeable professionals, and be prepared to adjust your strategy as the market continues to evolve. It's an interesting time to be involved in Florida real estate, and with the right approach, you can make your goals a reality!

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Housing Market Trends December 2024: Prices, Inventory, and More

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The housing market in December 2024 is showing signs of a late-season uptick, but overall, it's a mixed bag. While prices are mostly flat or slightly down year-over-year, we're seeing more houses come on the market, and homes are still taking longer to sell than they did last year. It's not a crazy boom, but it's not a total bust either. It’s a time of adjustment, I would say.

I've been watching the housing market closely, and I think this late-year activity is really interesting. So, let’s break it down based on recent data from realtor.com, shall we?

Housing Market Trends December 2024: What's Happening

The Price Puzzle: What's Going On?

Let's talk about prices first, because that's usually what everyone wants to know. According to data from Realtor.com, the median listing price has decreased by 1.2% compared to last year. That makes it the 29th week in a row that prices have been flat or lower than the same week in 2023. Now, that's a pretty consistent trend if you ask me.

However, there's a bit of a twist. When you look at the median listing price per square foot, it actually increased by 1.4%. What does that mean? Basically, it could signal that the mix of homes on the market has changed. We might be seeing more smaller, less expensive homes hitting the market, which brings down the overall median listing price. But, per square foot, the underlying value might be creeping up slightly.

Here's a quick recap on how the housing prices have trended over the past few weeks:

Data Point Year-over-Year Change
Median Listing Prices -1.2%
Median Price per Sq Ft +1.4%

So, what does this mean for you? If you're a buyer, it could mean that you might find some deals. If you're a seller, you might need to be a bit more strategic with your pricing. I mean you always need to be, but now, even more so.

More Houses on the Market? Yes, Please!

Here's a trend that could be helpful for buyers: new listings are up! We're seeing a 7.9% increase in new listings compared to this time last year. In fact, the past two weeks have had the biggest jump in new listings since April. It seems like people are finally ready to put their homes on the market.

I think this late-season push could be because sellers want to get the sale done before the year ends, and maybe even grab a new place themselves, too. I’ve seen this happen a few times over the years. This uptick in listings is a good sign, as it gives buyers more choices, and helps bring a little balance back to the market.

Inventory Growth: Still Strong, But Slowing Down

The number of houses for sale is still up year over year. For the 58th consecutive week, we’re seeing an increase in active listings. Specifically, we’re looking at a 23.4% jump compared to this time last year.

However, and here's the thing, this growth is the slowest we've seen since March 2024. It's like the market is finally taking a breather. I think the lingering effects of the higher mortgage rates are definitely playing a role here and there. It's like a dampener on both seller enthusiasm and buyer urgency.

This is not like, an earth-shattering rise in inventory, but it does mean that buyers have more options to choose from than they did last year. And that can give you a bit of an edge while negotiating. Here's a quick snapshot:

Data Point Year-over-Year Change
New Listings +7.9%
Active Listings +23.4%

Time on Market: Buyers Are Taking Their Time

This is where we really see how the market has shifted. Homes are taking 7 days longer to sell than they did this time last year. Now, that’s a significant jump. It's the 25th week in a row where the time on the market has increased. It basically means buyers aren't in a rush and are taking their time to make the best decision, especially with so many options and the higher rates being a constant thought.

However, there’s a glimmer of something happening, in the last week of the data, that is; the difference has gone down from eight days to seven. So, that’s definitely an indicator that market is perhaps trying to stabilize again.

I believe this is likely due to recent, slight drops in mortgage rates, which might encourage some buyers to move forward. We need to watch out for these signals, of course, and see if they're here to stay for a longer time. Here's a table showing how the market has shifted in recent weeks when it comes to time on the market:

Data Point Year-over-Year Change
Time on Market 7 days slower

My Take on the December Housing Market

So, what's my overall take? The housing market in December 2024 is definitely not a straightforward picture. We're seeing a mix of trends that suggest a market in transition.

  • For Buyers:
    • You have more choices than you did last year.
    • Homes are staying on the market a bit longer, giving you more time to make a decision.
    • You may have a slight advantage negotiating due to market dynamics
    • Don't rush, weigh your options, and don't hesitate to negotiate
  • For Sellers:
    • Prices aren't falling off a cliff, but they're not skyrocketing either.
    • More competition means you need to be strategic with pricing and marketing.
    • Be patient because houses are staying longer on the market now.
    • Present your house in the best possible light.

I believe this late-season uptick is a result of both sellers trying to wrap things up before the year ends and buyers trying to lock in a home before the holidays. The data shows that inventory is still higher than last year but the increase is slowing down and we have to keep an eye on this, along with mortgage rates and economic indicators.

I've been tracking these trends, and I can tell you that these shifts aren't happening in a vacuum. They're shaped by the overall economy and the sentiment of both buyers and sellers. What’s happening now is also shaping what may happen early next year.

Looking Ahead

The key is to stay informed and be adaptable. Both buyers and sellers need to be aware of the current market conditions and be prepared to adjust their strategies as needed. I think we'll see more of this stabilization continue into 2025. But who knows what the future holds? The housing market is always full of surprises, right?

Here's a summary of the key trends we've discussed:

  • Median Listing Prices: Down 1.2% year-over-year
  • New Listings: Up 7.9% year-over-year
  • Active Listings: Up 23.4% year-over-year (but growth is slowing)
  • Time on Market: 7 days slower year-over-year

I believe in doing my own due diligence, and I always advise you, my reader, to do the same. Rely on credible sources, don't believe everything you see or hear, and be smart with your money. It's a big decision, and I hope this article has been helpful as you navigate the December 2024 housing market.

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Turnkey Investment Properties

Discover high-quality, ready-to-rent properties designed to deliver consistent returns.

Contact us today to expand your real estate portfolio with confidence.

Contact our investment counselors (No Obligation):

(800) 611-3060

Get Started Now 

Why a 2008-Style Housing Market Crash is Unlikely in 2025?

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While headlines might paint a picture of a looming crash, a closer look at the data reveals a housing market more likely to experience a slowdown than a dramatic collapse. Let's delve into the key factors that suggest stability rather than a freefall in 2025.

Why a 2008-Style Housing Market Crash is Unlikely in 2025?

The most critical factor mitigating a crash is the stark contrast in inventory levels between 2008 and today. In the lead-up to the 2008 crisis, a glut of foreclosed properties flooded the market, creating a buyer's paradise and driving prices down. The National Association of Realtors (NAR) reports a national inventory of 3.8 months of supply in November 2024 [NAR], a far cry from the excessive supply that fueled the previous crash.

Imagine a scenario with ten eager homebuyers chasing only two available houses. Bidding wars naturally erupt, pushing prices upwards. This simple principle of supply and demand is precisely why a crash, fueled by an abundance of for-sale homes, is unlikely in 2025.

Data Spotlight: Inventory Levels

  • March 2024: 4.3 months of national housing supply (NAR)
  • Pre-2008 Crash: A significant surplus of foreclosed homes flooded the market

Guarding the Gates: Stricter Mortgage Lending

Another crucial safeguard against a crash is the significant tightening of mortgage lending standards since 2008. Reckless subprime lending practices, where unqualified borrowers received mortgages they couldn't afford, were a major catalyst for the previous crisis. Today, lenders have significantly stricter credit score requirements and often demand larger down payments.

The Federal Housing Finance Agency (FHFA) reports that the average credit score for a conventional mortgage in 2023 was 740, a substantial increase from the pre-crash era [FHFA]. This stricter vetting process ensures that homebuyers are financially prepared for homeownership, reducing the risk of mass defaults that could trigger a market collapse.

Data Spotlight: Mortgage Lending Standards

  • Pre-2008 Crash: Subprime lending practices were widespread.
  • 2023: The average credit score for a conventional mortgage is 740 (FHFA).

The Demographic Engine: Millennials Fuel Demand

Millennials, the largest generation in American history, are now entering their prime homebuying years. According to a report by Freddie Mac, 41% of millennials expect to buy a home in the next two years [Freddie Mac]. This surge in demand, coupled with the limited housing supply, will continue to exert upward pressure on prices. Even with rising interest rates, the sheer number of millennials seeking homeownership will act as a buffer against a significant price decline.

Data Spotlight: Millennial Homeownership

  • 41% of Millennials: Expect to buy a home in the next two years (Freddie Mac)

Location, Location, Location: A Market of Many Markets

It's important to remember that the national housing market is an umbrella term encompassing numerous regional markets, each with its own dynamics. While some areas, particularly those with stagnant job growth or overinflated housing bubbles, might experience a cooling-off period, a nationwide crash is highly improbable.

Regions with robust job markets, limited housing stock, and desirable locations are likely to see continued price stability, if not growth. For instance, Austin, Texas, with its booming tech industry and limited housing development, is expected to see continued price appreciation despite a national slowdown [MarketWatch]. So, while the national narrative might be one of caution, a closer look at your specific local market can provide a more accurate picture.

While the chances of a 2008-style crash are low, the current market does require a more cautious and informed approach from potential homeowners. Here are some key tips to navigate the 2024 housing market:

  • Embrace Patience: With low inventory and high competition, finding your dream home might take longer than expected. Be prepared to be flexible on your timeline and open to considering different neighborhoods or property types.
  • Get Pre-Approved: Don't waste time house hunting without a pre-approval letter from a lender. Knowing your budget upfront strengthens your offer and demonstrates seriousness to sellers.
  • Work with a Local Realtor: A knowledgeable realtor can provide invaluable insights into your specific market, including price trends, negotiation strategies, and local considerations.
  • Focus on Long-Term Value: Don't get caught up in bidding wars over every available property. prioritize homes with strong long-term value, such as good school districts or desirable locations that will retain their worth.
  • Consider All Costs: Factor in not just the mortgage payment, but also property taxes, homeowners insurance, and potential maintenance costs when determining affordability.

Beyond the Headlines: A Time for Opportunity

While some may view the current market with trepidation, it's important to acknowledge the potential opportunities. Here are a few reasons why buying in 2024 might still be a wise decision:

  • Historically Low Interest Rates (Compared to Past Decades): While interest rates have risen from recent lows, they are still historically low compared to past decades. This translates to lower monthly mortgage payments compared to what buyers faced in previous eras.
  • Long-Term Investment: Historically, real estate has proven to be a sound long-term investment. Owning a home allows you to build equity and provides a hedge against inflation.
  • Stability in a Volatile World: In an era of economic uncertainty, homeownership can provide a sense of stability and security.

The Bottom Line: Knowledge is Power

The housing market is likely to be a period of adjustment, not a crash. By understanding the key factors at play, conducting thorough research, and working with qualified professionals, prospective homebuyers can navigate the current environment and make informed decisions. Remember, buying a home is a significant financial commitment, but with the right approach, it can be a rewarding investment in your future.

5 High Risk Housing Markets for 2025 Buyers Should Avoid

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Are you thinking about buying a home in 2025, or maybe you're looking to invest in real estate? If so, you're probably aware that the housing market has been going through a period of change. Some experts believe a housing market crash is looming in certain areas of the country.

This article aims to help you navigate these uncertain times by providing you with information about the 5 riskiest markets that could potentially face a major drop in home prices in 2025. Being prepared and understanding the potential risks associated with the housing market, even in specific areas can help you make sound decisions and protect your financial well-being. So, let's dive in and examine these markets in greater detail.

Housing Market Crash: 5 Riskiest Markets to Avoid in 2025

Understanding the Current Housing Market

As of November 2024, the national housing market has shown signs of slowing down. Home prices increased by 3.4% year-over-year in September 2024. However, month-over-month growth has been rather flat since late summer. In fact, home price growth is projected to decline slightly from September 2024 to October 2024 before seeing a modest year-over-year increase by 2.3% from September 2024 to September 2025. Several factors contribute to this relatively flat market.

  • Mortgage Rate Volatility: Mortgage rates have been fluctuating, causing some buyers to hesitate before making a purchase. The potential impact of the upcoming election is adding uncertainty to the overall market.
  • Economic Uncertainty: The U.S. economy showed a weak job growth number of just 12,000 jobs in October 2024, the fewest in nearly four years. This kind of news can make people nervous about the economy's future and their ability to afford a home.
  • Buyer Hesitation: Many homebuyers have decided to wait and see what happens with mortgage rates and the overall economy before they commit to buying a home. They believe that there might be a better opportunity in the future.

These factors are contributing to a cautious outlook on the housing market. Now, let's see which areas are most vulnerable to a housing market crash in 2025.

CoreLogic's Market Risk Indicator (MRI)

I always like to use the resources that provide the most reliable and up-to-date information on the housing market crash. CoreLogic is a leading provider of property information and analytics. They have a very useful tool called the Market Risk Indicator (MRI). This tool provides insights into the overall health of the housing market across the country and, in my opinion, it is one of the best resources to utilize for assessing potential housing market crash risk in various locations.

The MRI considers various factors to determine the probability of a home price decline in a particular area. This includes things like job growth, affordability, inventory levels, and the overall state of the local economy. Based on the CoreLogic MRI, five metropolitan areas are at a very high risk of a home price decline over the next 12 months.

5 Riskiest Housing Markets to Avoid in

5 Riskiest Housing Markets to Avoid in
Source: CoreLogic

Now let's dive deeper into the five metropolitan areas that are facing the highest risk of a home price decline based on CoreLogic's MRI. It's important to remember that these are predictions, and actual results may vary.

1. Provo-Orem, UT

  • Risk Level: Very High
  • Probability of Price Decline: Above 70%
  • Confidence Score: 50-75%

Provo-Orem, located in the heart of Utah, experienced explosive growth during the pandemic and it is still a very popular location. This growth fueled a surge in home prices, but now the market appears to be cooling down, potentially leading to a price decline.

My thoughts: I believe that the market in Provo-Orem was simply too hot too fast. The prices were out of sync with fundamentals like local wages, which were not keeping up with price appreciation. Now, with interest rate uncertainty and the cooling economy, this market is becoming vulnerable.

2. Atlanta-Sandy Springs-Roswell, GA

  • Risk Level: Very High
  • Probability of Price Decline: Above 70%
  • Confidence Score: 50-75%

Atlanta, like many other Southern metropolitan areas, has experienced a strong housing market in recent years. However, it has become more vulnerable to a downturn due to rising interest rates, supply chain disruptions, and overall economic uncertainty.

My thoughts: Atlanta has a strong history as a major business hub. While the metro area might experience a pullback, I think a decline in prices would be relatively short-lived. The economy will eventually rebound, and homebuyers will return to the market. But in the short-term, I would be cautious about buying a home in Atlanta.

3. Salt Lake City, UT

  • Risk Level: Very High
  • Probability of Price Decline: Above 70%
  • Confidence Score: 50-75%

Salt Lake City was one of the fastest-growing housing markets in the United States, and during that time the median home price increased by a significant amount. However, like Provo-Orem, a rapid rise in prices and cooling economy could lead to a price correction.

My thoughts: The Salt Lake City metro area has lots of economic drivers and is a beautiful location. The concerns here are very similar to those of Provo-Orem. The market heated up too quickly and might be in for a decline over the next year.

4. Gainesville, FL

  • Risk Level: Very High
  • Probability of Price Decline: Above 70%
  • Confidence Score: 50-75%

Gainesville is a college town with a large student population. This can sometimes make housing markets more volatile. The Gainesville market is at risk due to several factors like affordability concerns and a potential slowdown in student enrollment.

My thoughts: Gainesville has historically been a reliable housing market, and the presence of the University of Florida adds stability. But, the market is still vulnerable to interest rate hikes and economic uncertainty.

5. Palm Bay-Melbourne-Titusville, FL

  • Risk Level: Very High
  • Probability of Price Decline: Above 70%
  • Confidence Score: 50-75%

Palm Bay-Melbourne-Titusville is a region that is reliant on the aerospace and defense industries. While the local economy is strong, it also makes the area subject to changes in federal spending. With a large supply of homes and a cooling economy, the market is vulnerable to price declines.

My thoughts: Palm Bay-Melbourne-Titusville has a strong economy, but the high concentration of employment within a few industries means that it's vulnerable to changes in defense spending and other factors. The risks are certainly present in this area.

Understanding the Risks and Mitigating Them

While these five areas are identified as high-risk, it's crucial to remember that not all homes in these markets will necessarily experience the same level of price decline. Homes that are in excellent condition, well-located, and offer desirable features will likely hold their value better during a downturn.

Here are some tips to consider if you're looking to buy a home in these high-risk markets:

  • Do your homework: Research the local market and understand the factors that contribute to the risk of a housing market crash. Look at recent sales data, inventory levels, and economic indicators.
  • Don't overpay: Avoid getting caught up in bidding wars or paying top dollar for a home. Try to negotiate the best price possible to protect your investment.
  • Get pre-approved for a mortgage: Knowing how much you can afford will help you avoid overspending on a home.
  • Consider your personal financial situation: Make sure you can afford your mortgage payments even if home prices decline.
  • Be prepared for a possible price drop: If you are in the high-risk areas, have a strategy for how you will deal with a potential decrease in home value.
  • Be realistic about your expectations: Don't expect to get rich quick by investing in real estate, especially in a potentially volatile market.

Factors to Consider Beyond the MRI

While the CoreLogic MRI is a valuable tool, it is important to consider other factors that could influence the housing market in these areas. For example:

  • Local job market: Strong local job growth can help support home values.
  • New construction: An increase in new homes can put downward pressure on prices.
  • Interest rates: Rising interest rates will likely reduce affordability and slow down the market.
  • Inventory levels: If the number of homes for sale increases, it could lead to a price decline.

The Bottom Line

The housing market is dynamic, and prices can fluctuate based on various economic and local factors. The five markets highlighted above are at a high risk of experiencing home price declines in the next 12 months, according to CoreLogic's MRI.

It is my belief that you should proceed with caution in these markets. If you are considering buying a home, it is essential to do your research, understand the risks, and make informed decisions.

I hope this article has helped you better understand the potential risks and provided valuable information to help you make informed decisions about your real estate goals in 2025.

Housing Market Crisis: Only 25% of Homes Sold to First-Time Buyers

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Things have changed a lot in the housing market lately, with an alarming statistic emerging from the voice of Barbara Corcoran: less than 25% of all homes sold are going to first-time buyers. This startling revelation from the Shark Tank star highlights a pressing concern in real estate as many young people find themselves sidelined in the quest for homeownership.

With rising prices and fluctuating interest rates, achieving the American dream of owning a home is becoming increasingly challenging for new buyers. Corcoran, a real estate mogul and television personality, spotlights this critical issue, emphasizing its implications for future generations.

Housing Market Crisis: Only 25% of Homes Sold to First-Time Buyers

Key Takeaways

  • Less than 25% of homes sold are going to first-time buyers, marking an all-time low.
  • The average sale price of homes reached a staggering $501,000 in Q3 2024.
  • Interest rates remain between 6% and 7%, creating confusion and hesitation among potential buyers.
  • The current average age of a homebuyer is 56 years old, skewing the demographics of homeownership in America.
  • Many older homeowners wish to age in place, reducing available listings for first-time buyers.

Understanding the Current Housing Market

As the housing market is assessed today, the profound transformation of home buying dynamics becomes evident. The 30-year mortgage, once hailed as a simple pathway to homeownership, now feels more like a mirage for first-time buyers. Barbara Corcoran's insights during her appearance on Fox's Cavuto: Coast to Coast encapsulate the current crises that young buyers face. With less than 25% of home sales going to new buyers, it's clear that crucial hurdles are present in the market.

According to a recent article on Benzinga, this statistic is especially alarming given that it marks a historical low for first-time buyers. The St. Louis Federal Reserve reports that the average sale price for a home has skyrocketed to $501,000 as of the third quarter of 2024. This significant increase means that many potential first-time buyers are facing a daunting financial slope. While a modest home might have been attainable a few years ago, today’s market sees starter homes priced at $1,000,000 or more in major coastal urban centers like Los Angeles, Seattle, and New York City.

This pricing structure changes the narrative around homeownership. For many families and young individuals, the dream of owning a home is slipping away, replaced by an unfortunate reality of renting or living with family.

The Impact of Interest Rates

In addition to high home prices, interest rates have created an unsettling atmosphere for homebuyers. These rates currently fluctuate between 6% and 7%, a range that contributes to the confusion and anxiety prospective buyers experience. Corcoran notes that potential homebuyers are lacking optimism regarding future rate drops. Instead, many have resigned themselves to the idea that purchasing a home at this price and rate might not be within their reach.

When homeowners see rates hovering around this range, they often feel hesitant about putting their homes on the market—adding to an already tight inventory, which limits options for first-time buyers. The lack of buyers means sellers can hold out for better offers, leaving those who are new to the market feeling hopeless and frustrated.

Corcoran explains, “What we're losing right now, (what) we desperately need is more first-time buyers. Less than 24% of people buying now are first-time buyers, which is an all-time low.” This trend has not only changed who can buy homes but has also led to a drastic transformation in the average profile of a homebuyer in America.

The Shift in Buyer Demographics

The ramifications of this situation stretch beyond finances. The average age of today’s homebuyer is now 56 years old, creating a stark contrast with previous generations who were often younger when they purchased their first homes. This demographic shift signifies that many more seasoned homeowners are now making up the majority of buyers in the current market. As many of these older homeowners choose to stay in their houses longer due to high market prices and current interest rates, the result is reduced inventory, leaving younger buyers stuck in a quandary.

A recent survey by Clever Real Estate adds clarity to this predicament; nearly half of Americans over 56 report plans to age in place, a statement indicating a reluctance to move despite the possibility of profiting from selling their homes. For prospective buyers, the implications of this trend are severe as they navigate an already challenging market.

The Ripple Effect of the Inventory Crunch

The diminishing availability of homes for sale creates a ripple effect that impacts more than just first-time buyers. When fewer homes are sold, fewer transactions occur, and this consequently leads to a slowdown in the entire housing market. Something has to give, and if demand stays high while supply diminishes, prices are likely to rise further.

Moreover, the increased competition for existing housing stock tends to favor those who can afford to enter the market again—usually seasoned buyers who have equity to cash in on. For those aiming to purchase their very first home, the competition is daunting. Real estate investors show interest in properties typical for first-time buyers, further squeezing the options available to newcomers.

The Potential for Market Recovery

Despite the sobering statistics cited by Corcoran, a glimmer of hope exists for first-time buyers. Should interest rates decline significantly—especially on mortgages—there’s a chance for increased activity and movement in the housing market. Corcoran expresses optimism that a return to 5% rates could trigger a “ballistic” market surge, reviving opportunities for first-time buyers and encouraging sellers to list their homes.

On the other hand, she warns that a return to interest rates above 7% could paralyze the market. Such a situation might lead to reduced economic growth overall, creating a detrimental cycle that impacts not only homebuyers but also those engaged in related support services like renovations, landscaping, and home improvement sectors.

Why This Matters for Future Generations

This discussion isn’t merely about numbers; it's about what homeownership represents in American culture. Across generations, owning a home has been a keystone of building wealth. However, when barriers arise that block access for first-time buyers, the prospect of homeownership begins to fade, raising serious questions about economic mobility and future opportunities.

If the current trend continues, we may witness a future where homeownership is not just out of reach for many but instead becomes an exclusive privilege of the wealthiest segments of society. The ability to secure loans, pay down debts, and save enough for a down payment requires a kind of economic resilience that young people today struggle to attain. With the dual challenges of high prices and fluctuating interest rates, the path to homeownership grows more uncertain.

Looking Ahead: The Future of Homeownership

As we consider the trajectory of the housing market, it’s imperative to question what measures can be taken to improve the situation for first-time buyers. Initiatives to foster affordable housing and loan programs that cater to younger buyers could be pivotal in reversing the current trend. Legislation that creates incentives for building more affordable homes could also address the supply issue impacting the market today.

Moreover, education plays a crucial role in preparing young buyers for the realities of homeownership—understanding financial management, mortgages, and the investment value of real estate can equip them to navigate these challenging waters more effectively.

In conclusion, Barbara Corcoran's alarm about the housing market—specifically regarding first-time buyers—rings loud and clear. As we embrace the complexity of these trends, it serves as a reminder that our approach to housing must adapt. The need for accessible homeownership opportunities for younger generations must be prioritized, or we risk creating a significant economic divide that could take generations to address.

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