Norada Real Estate Investments

Will Housing Prices Drop in 2025 in California?

by

Will Housing Prices Drop in 2025 in California? Okay, let’s get straight to the point because I know you’re here for answers. The short answer is: it’s complicated. While some areas in California might see a slight dip in housing prices in early 2025, a significant, across-the-board crash is unlikely based on the latest data.

It's more like a mixed bag, with some areas projected to increase in value and others to decrease. Now, let's dive deeper into the details, and I'll share my thoughts on what this all means for you, whether you're looking to buy, sell, or just curious about the California real estate market.

Will Housing Prices Drop in 2025 in California?

Why is Everyone So Obsessed with California Housing? I get it. California's housing market is like a soap opera – always dramatic, always unpredictable, and everyone has an opinion. And for good reason! California's real estate is notoriously expensive, and it impacts so many people's lives, whether they're dreaming of buying their first home, looking to move up, or trying to navigate the complexities of the rental market. I, like many others, have experienced the highs and lows of the market firsthand, and that’s why I try to stay informed.

The allure of California – the sunshine, the beaches, the tech jobs – fuels a lot of the demand. But that demand comes with a price tag, and lately, that price tag has felt pretty hefty. We’ve seen a period of rapid appreciation, and it’s natural to wonder if the bubble will burst. That brings us back to the big question: will prices actually drop in 2025?

What's Happening with California Housing Right Now?

Before we look ahead to 2025, it’s useful to understand where we are right now, in late 2024. Let’s take a look at some key data points from Zillow to give us an idea of what’s happening across the state:

  • Average Home Value: The average home in California is worth around $778,355. That's a hefty price tag!
  • Yearly Appreciation: Prices have gone up by 3.3% over the past year. This shows the market is still appreciating, just at a lower rate than previously seen.
  • Speed of Sales: Homes are going to pending in about 22 days. This means there is still a lot of movement in the market.
  • For Sale Inventory: There are 81,089 homes for sale. This gives us an idea of how many homes are available at any given time.
  • New Listings: About 23,679 homes were listed for sale in November.
  • Median Sale to List Ratio: The median sale to list ratio was 1.000. This suggests that, on average, homes are selling at their asking price.
  • Median Sale Price: The median price of homes sold was $727,000. This is the actual price people are paying for homes.
  • Median List Price: The median listing price was $742,850. This shows us what sellers are asking for.
  • Sales Over List Price: A significant 43.7% of homes are selling for more than their listing price.
  • Sales Under List Price: Still, a hefty 41.6% of homes are selling below their listing price.

Based on this, it looks like things are still active, and there's definitely a mix of homes selling both above and below the asking price. This tells me we're not in a straightforward seller's market or a complete buyer's market but a more complex situation.

Projected Housing Price Changes: A Region-by-Region Look

Now for the fun part: what the experts predict. Zillow has provided some interesting data on projected price changes across various metropolitan statistical areas (MSAs) in California. This is where things get really interesting because we're not talking about a uniform statewide prediction. Some regions are expected to see growth while others are projected to experience a decline. Here's a breakdown of some key areas:

Region November 30, 2024 January 31, 2025 October 31, 2025
Los Angeles, CA 0.2% 0.4% 2.3%
San Francisco, CA -0.4% -1.3% -2.3%
Riverside, CA 0% 0% 2.9%
San Diego, CA -0.2% -0.7% 2.3%
Sacramento, CA -0.1% -0.6% 0%
San Jose, CA 0.2% -0.5% 0.3%
Fresno, CA 0% 0% 1.8%
Bakersfield, CA 0.2% 0.4% 3.2%
Oxnard, CA -0.2% -0.7% 0.9%
Stockton, CA -0.1% -0.6% 0.4%
Modesto, CA -0.1% -0.3% 1.3%
Santa Rosa, CA -0.3% -0.9% -1.6%
Visalia, CA 0.1% 0% 2.1%
Vallejo, CA -0.2% -0.6% -0.5%
Santa Maria, CA -0.1% -0.4% 3.1%
Salinas, CA -0.1% -0.4% 1.3%
San Luis Obispo, CA -0.2% -0.6% 1.1%
Merced, CA -0.1% -0.3% 1.5%
Santa Cruz, CA -0.4% -1.3% -0.4%
Chico, CA -0.1% -0.5% -2.1%
Redding, CA 0% -0.2% 0.2%
El Centro, CA 0.3% 0.3% 1.9%
Yuba City, CA -0.1% -0.2% 1.2%
Madera, CA 0.1% 0.3% 2.5%
Hanford, CA 0.2% 0.3% 2.4%
Napa, CA -0.5% -1.2% -1.3%
Eureka, CA -0.4% -1.4% -3.4%
Truckee, CA -0.2% -0.9% -0.9%
Ukiah, CA -0.6% -2.2% -5.8%
Clearlake, CA -0.3% -1% -2.2%
Red Bluff, CA -0.2% -0.3% -0.3%
Sonora, CA -0.3% -1.4% -1.8%
Susanville, CA -0.3% -0.8% -1.4%
Crescent City, CA 0.5% 0.9% 1.3%

Graphs Showing Projected Home Price Gains and Drops


 



What Does This Data Tell Me?

Okay, let's break this down. It's clear that not all of California is behaving the same way. Here are a few of my observations and personal opinions:

  • Early 2025 Weakness: Many areas, including major cities like San Francisco, San Diego, and even parts of the Bay Area, are projected to see price declines in the early months of 2025. This might be a reflection of the typical seasonal slowdown, but it's definitely something to watch. Personally, I think a lot of folks are just taking a breather after the intense activity in the last few years, and sellers might be more willing to negotiate.
  • Mid-to-Late 2025 Potential Rebound: Interestingly, a lot of these same areas are projected to rebound and even experience growth by the end of 2025. This points towards a potential for a more active buying season later in the year. This also suggests to me that any early dips might be temporary and could even represent a buying opportunity for some.
  • Regional Variations: Look at the difference between Bakersfield (projected to increase by 3.2%) and Ukiah (projected to decline by 5.8%!). It's a classic example of “location, location, location.” This underscores that the California market isn't a single entity. Each local market has its own dynamics, influenced by factors like job growth, local economy, and the availability of housing.
  • Smaller Cities: I'm also seeing that some smaller cities and more rural areas are showing significant variance in their projected performance. This highlights the need to pay close attention to individual areas before assuming a statewide trend.

Why Might Housing Prices Drop (or Not)?

There are several factors that could influence whether housing prices drop in 2025. Here's a look at some of the key ones:

  • Interest Rates: This is a big one. Higher interest rates make mortgages more expensive, which can dampen demand and cool down the market. The Federal Reserve's decisions on interest rates will be critical.
  • Inflation: Persistently high inflation can impact affordability and put pressure on buyers. Inflation is starting to ease, but it still affects how much people can afford to spend.
  • Job Market: A strong job market usually means more people with the financial means to buy homes. If we see a slowdown in hiring or more layoffs, it could impact housing demand.
  • Housing Supply: California has been notoriously undersupplied with housing for years. If more homes come on the market, it could lead to more buyer leverage and potentially lower prices. But, given the high demand in so many areas, new supply gets absorbed quickly.
  • Economic Outlook: The overall health of the economy will play a crucial role. A recession, or even the fear of one, could lead to a slowdown in housing.

My Personal Thoughts

Okay, here's my honest take, based on my own experience and reading the market. I don't see a major, statewide crash coming. I think that a major crash is less likely because of the demand-supply gap that's been existing for years. However, I do see opportunities for buyers in 2025, especially if you're willing to be patient and strategic:

  • Don't Panic: If you're a homeowner, don't panic sell because you read a headline about a potential market drop. The reality, as the data shows, is that it’s a complex picture with local variations. It doesn't look like a market where the sky is falling.
  • Be Prepared to Negotiate: If you're a buyer, get ready to negotiate. The data shows that more homes are selling below their asking price and there is a potential weakness in the early months of 2025. You might have more negotiating power than you did in the past few years.
  • Think Long Term: Real estate is a long-term investment, not a get-rich-quick scheme. Focus on your personal financial goals and what makes sense for you in the long run. Trying to time the market is a recipe for stress.
  • Pay Attention to Local Markets: Don't rely on state-level trends; zoom in to specific neighborhoods. What's happening in San Francisco is different from what's happening in Riverside or Bakersfield. Do your homework!
  • Work With Professionals: If you're serious about buying or selling, team up with a good real estate agent, a mortgage lender, and perhaps a financial planner. They can give you personalized advice based on your situation.
  • Stay Informed: Keep reading sources like this and doing your research to stay ahead of the game. The market changes quickly, and keeping up is the key.

Conclusion

So, will housing prices drop in 2025 in California? It's not a simple yes or no. I'd say it's highly likely that some areas will see price dips in early 2025, followed by a potential rebound. Some regions, however, will see an upward trend through the year. The market is expected to continue to be highly variable across California, so it’s vital to do your due diligence. If you're in the market, whether buying or selling, I encourage you to stay patient, informed, and proactive. With the right approach, you can navigate this complex landscape.

Also Read:

13 Housing Markets in California Face High Risk of Decline

by

According to a recent report from ATTOM, a leading provider of property data and analytics, 13 housing markets in California, primarily inland, are facing a higher risk of decline compared to other parts of the nation. These markets are experiencing a confluence of challenges, including affordability issues, underwater mortgages, and higher-than-average unemployment rates. Let's delve into the details to understand this concerning trend.

I've been following the real estate market for a while now, and the findings in this report, based on Q3 2024 data, have certainly raised some eyebrows within the industry. It's important to understand that this doesn't necessarily mean that these areas are headed for an immediate crash, but rather that they are more susceptible to potential downturns compared to other regions. While we've seen remarkable growth across the country in the past decade, there are pockets of vulnerability that could be exposed as market conditions change.

California Housing Crisis: 13 Markets at High Risk of Decline

Understanding the Risk Factors

ATTOM's report identifies counties that are more or less at risk based on a variety of factors, including:

  • Home Affordability: The percentage of average local wages required to cover major home ownership expenses (mortgage, property taxes, and insurance).
  • Underwater Mortgages: The percentage of homeowners who owe more on their mortgage than their home is currently worth.
  • Foreclosures: The rate of foreclosure filings in a given area.
  • Unemployment: The local unemployment rate, as a measure of economic health.

The report ranks counties based on these factors, combining them into a composite score that helps paint a more comprehensive picture of each market's vulnerability. Counties with the lowest composite scores are deemed most at-risk, while those with the highest are deemed least at-risk.

California's Inland Markets: A Closer Look

The housing markets in California that were flagged as being most at-risk in the report are mostly located inland, away from the coastal areas that have historically seen more robust growth. Let's take a look at the 13 counties highlighted in California:

  • Butte County (Chico)
  • Contra Costa County (outside Oakland)
  • El Dorado County (outside Sacramento)
  • Humboldt County (Eureka)
  • Solano County (outside Sacramento)
  • Kern County (Bakersfield)
  • Kings County (outside Fresno)
  • Madera County (outside Fresno)
  • Merced County
  • San Joaquin County (Stockton)
  • Stanislas County (Modesto)
  • Riverside County
  • San Bernardino County

These areas have experienced a surge in housing costs in recent years, but wage growth hasn't kept pace. As a result, home ownership is becoming increasingly unaffordable for many residents. In addition, some of these areas also have relatively high rates of underwater mortgages and foreclosures, further contributing to their vulnerability.

Let's Illustrate with an Example

Take, for example, Merced County. It had a very high unemployment rate of 9.1% as of August 2024. Also, the major home ownership costs (mortgage, property taxes, and insurance) consumed a significant portion of average local wages. This means that many residents are struggling to make ends meet, and a slight shift in economic conditions could lead to more difficulties in the housing market.

Other Vulnerable Markets

It's worth noting that California isn't the only state with areas that are facing elevated risk. In fact, some other regions around the country, including parts of New Jersey, Illinois, and Florida, also appear on ATTOM's list of vulnerable counties. It seems that areas with substantial challenges related to affordability, unemployment, and underwater mortgages are more vulnerable to housing market troubles.

Let's look at a few other markets facing the risks:

  • New York City: Areas within and surrounding New York City, including Kings County (Brooklyn) and New York County (Manhattan) faced high affordability hurdles, where ownership expenses required more than 100% of the average local wages.
  • Chicago: Cook, Kane, Kendall, McHenry, and Will counties in Illinois experienced a mix of high affordability costs and a significant percentage of mortgages underwater.
  • New Jersey: Essex, Passaic, and Sussex counties, which are suburbs of New York City, faced challenges similar to New York City with high affordability and some mortgages underwater.

The Role of Affordability

One of the key drivers of vulnerability in these housing markets in California and elsewhere is affordability. Home prices have been rising steadily for many years, outpacing wage gains in many areas. For example, the median home price in the United States was $350,000 in Q3 2024, with the average household making about $75,000 annually. The situation has been exacerbated by increasing interest rates, which have made borrowing more expensive, leading to a rise in mortgage payments.

I've seen this trend firsthand in my own work. Many potential homebuyers are struggling to secure financing, and existing homeowners are grappling with rising costs. In some cases, it has become almost impossible for young people or first-time buyers to enter the housing market. The lack of affordability is a major contributor to the vulnerability of these markets, as it creates a situation where any economic downturn could push many into financial distress.

Impact of Underwater Mortgages

Another crucial factor that impacts the vulnerability of these markets is the prevalence of underwater mortgages. An underwater mortgage means that the borrower owes more on the loan than the house is currently worth. This can create a situation where homeowners are less likely to make timely payments if they fall on hard times, or they might even be forced to sell their homes at a loss, which can contribute to a further decline in property values. The increase in underwater mortgages is very concerning and could make these markets more vulnerable to housing market fluctuations.

Foreclosures and Unemployment

Foreclosures and unemployment also play a role in these risks. Higher foreclosure rates can further depress property values, impacting the neighborhoods and affecting investor confidence. And, higher unemployment rates mean that more homeowners are more susceptible to falling behind on mortgage payments or losing their homes to foreclosure. The combination of high unemployment and a significant number of homes underwater means that these markets are more vulnerable to housing market troubles.

The South: A Haven of Stability?

While certain parts of the country face considerable risk, other areas appear to be more resilient. ATTOM's report notes that markets in the South have a lower concentration of at-risk counties. States like Tennessee, Wisconsin, and Virginia had a higher concentration of the least-at-risk counties, based on the various factors assessed by ATTOM.

This stability is likely due to a combination of factors, including more affordable housing, lower unemployment rates, and a slower pace of appreciation in home prices.

What Does This Mean for the Future?

The data from ATTOM paints a picture of a housing market that is facing a combination of challenges. While the nation has enjoyed a period of strong growth, there are underlying vulnerabilities that could come to the surface if conditions change.

I'd like to caution readers that this report doesn't predict a housing market crash, but rather indicates areas that are potentially at a higher risk of experiencing a downturn. That said, if there is a significant change in the economy (like higher-than-expected inflation, higher interest rates, or a recession) these markets could experience a decline in home prices and a surge in foreclosures.

Potential Solutions

To address the vulnerability of these housing markets in California and elsewhere, I believe there are a few things that need to be considered:

  • Increased Affordable Housing Options: Developing more affordable housing options in these at-risk markets could help reduce the strain on families struggling to buy or rent.
  • Job Growth and Economic Diversification: Promoting job growth in different sectors could help strengthen local economies and reduce unemployment rates.
  • Improved Financial Literacy: Educating homeowners on financial matters, especially on mortgage and property management, could help them avoid falling behind on payments during challenging economic times.
  • Community Support and Resources: Providing support services to struggling homeowners, such as financial counseling and foreclosure prevention programs, can assist with preventing foreclosures and potential decline in property values.

Conclusion

The housing markets in California and other parts of the nation are facing a complex set of challenges, particularly in areas where affordability is a major concern. The markets highlighted in the ATTOM report are not necessarily guaranteed to experience a decline, but it's important to understand the factors that make them more vulnerable. By monitoring these risks and taking steps to address them, communities can potentially mitigate the impact of future economic downturns and help ensure the stability of their housing markets.

Partner with Norada, Your Trusted Source for 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.

Reach out to our investment counselors:

(949) 218-6668 | (800) 611-3060

Contact Us Today

 

Also Read:

California Housing in High Demand: 19 Golden State Cities Sizzle

by

California's housing market continues to be a complex landscape, but according to a recent report by Realtor.com, there are pockets of the state experiencing a surge in buyer activity and shrinking inventories. In fact, a whopping 19 California metro areas landed on Realtor.com's coveted “hottest real estate markets” list for 2024! Let's delve deeper into the ranking system and explore which California cities are currently sizzling in the real estate market.

This is a significant showing for the Golden State, highlighting the diverse appeal of various California locations. The rankings, meticulously compiled by Realtor.com, leverage a unique methodology that provides valuable insights for both home buyers and sellers.

Realtor.com's Market Hotness Index isn't just smoke and mirrors. It's a data-driven approach designed to shed light on the intricacies of local housing markets. Here's how they decipher which areas are experiencing a fiery demand:

  • Buyer Activity: Realtor.com analyzes listing views in each market. A high number of views translates to strong buyer interest, indicating a hot market.
  • Inventory Levels: Conversely, the median days on market serves as a gauge of available inventory. A lower number suggests properties are selling quickly, signifying a seller's market with tight supply.

By combining these metrics, Realtor.com creates a score that reflects the interplay between buyer demand and available homes. This allows them to rank metro areas across the country and identify the markets where things are heating up the fastest.

This approach provides a clear advantage for both buyers and sellers. For buyers, it highlights areas where competition is fierce and homes might move quickly. Informed buyers can then adjust their strategies to be more competitive. Sellers, on the other hand, can leverage this knowledge to understand the current market conditions and potentially price their properties more effectively.

It's important to remember that the ranking is a snapshot in time. Housing markets are constantly evolving, and local factors can influence the dynamics. However, Realtor.com's Hotness Index provides a valuable starting point for anyone considering buying or selling a home in California.

Now that we understand the ranking system, let's jump into the California contenders on this year's Hottest Real Estate Markets list!

California Metros on the Hot Housing Market List

California's diverse housing market is reflected in the spread of cities across Realtor.com's Hotness Index. Here's a closer look at some of the California contenders, ranked from hottest to less hot:

Top Performers (Ranked 39-53): A Seller's Paradise

Sacramento, Santa Rosa, Modesto, Santa Cruz, and the Oxnard-Thousand Oaks-Ventura metro areas are the hottest properties in California according to Realtor.com's list.

These markets are experiencing a surge in buyer activity, with homes selling quickly due to a shrinking inventory. This translates to a prime selling opportunity for homeowners in these areas, but a competitive environment for buyers who may need to be prepared to act fast and potentially engage in bidding wars.

Heating Up (Ranked 63-77): Rising Demand, Potentially Tightening Supply

Visalia-Porterville, San Diego-Carlsbad, Stockton-Lodi, and even the San Francisco Bay Area (including San Francisco-Oakland-Hayward) are showing signs of heating up. Buyer interest is on the rise in these areas, and the available inventory could potentially start to dwindle. This creates a dynamic market where sellers may have more leverage, but buyers can still find opportunities if they are prepared to move quickly and adjust their strategies.

Emerging Markets (Ranked 86-155): Buyer Interest Grows, Inventory Watch

Fresno, Vallejo-Fairfield, Yuba City, Salinas, and Santa Barbara are also experiencing a rise in buyer interest, landing them on Realtor.com's Hotness Index. While these locations are attracting more potential buyers, they might still offer a wider range of properties available compared to the top-ranked cities.

This could be a good option for buyers seeking more choices, but it's important to stay informed about inventory trends as the market evolves. Interestingly, cities like Los Angeles and Riverside also appear on the list, although further down the ranks. This suggests a potentially more balanced market in these areas, with motivated buyers encountering a decent range of available properties.

Tips for Buyers and Sellers

California's sizzling housing market presents both challenges and opportunities. Here are some tips to help you navigate the hot market, whether you're a buyer hoping to land your dream home or a seller aiming to capitalize on the current conditions:

For Buyers:

  • Get Pre-Approved: In a competitive market, a pre-approval letter demonstrates your seriousness and financial strength to sellers. This can give you an edge over other buyers, especially in bidding wars.
  • Be Ready to Act Quickly: Homes are likely to move fast, so decisiveness is key. Have your realtor set up alerts for new listings that meet your criteria and be prepared to make an offer quickly.
  • Consider Expanding Your Search: While your heart might be set on a specific neighborhood, be open to exploring other areas within your chosen metro area. This can increase your chances of finding a suitable property that fits your budget.
  • Work with a Savvy Realtor: An experienced local realtor can be your secret weapon. They can provide valuable insights into specific neighborhoods, guide you through the negotiation process, and help you craft competitive offers.

For Sellers:

  • Price Your Property Strategically: While the market is hot, overpricing can backfire. Consult with your realtor to determine a competitive yet realistic price point that will attract qualified buyers.
  • Stage Your Home for Success: First impressions matter. Invest in staging your home to showcase its best features and create an inviting atmosphere for potential buyers.
  • Be Flexible: While you might have an ideal selling timeframe in mind, be prepared to be somewhat flexible to accommodate buyer needs and maximize your chances of a successful sale.

Remember, the California housing market is dynamic and can vary significantly by location. The tips above provide a general framework, but consulting with a qualified local realtor is essential for navigating the specifics of your situation. With careful planning, a strategic approach, and the right guidance, you can conquer California's hot market and achieve your real estate goals.

ALSO READ:

Housing Market 2024: 10 California Cities for First-Time Homebuyers

Real Estate Forecast Next 5 Years California: Bright Future?

California Housing Market Booms: Investor Purchases Are Soaring

Is it a Good Time to Buy a House in California in 2024?

Most Popular Housing Markets: Unveiling Hotspots of 2024

by

If you're anything like me, you've probably been glued to real estate websites, dreaming about your next move. Well, I've got some exciting news for you! According to Zillow's analysis of 2024, Manchester, New Hampshire is the most popular housing market right now. But it doesn't stop there. This year's trends point towards a fascinating shift, with smaller cities and exurbs grabbing the spotlight, alongside surprising regional winners. So, let's dive in and explore where everyone seems to be looking to call home!

The Rise of the Exurbs: A New Trend in Housing

Forget the hustle and bustle of big cities, many of us are looking for something different. What's interesting this year is that exurbs are really taking the lead. These are smaller towns located outside of the main suburbs but still close enough for an easy commute. I've always found the idea of living in a place that balances peaceful living with the option to easily get to the city very appealing.

The increase in hybrid work setups seems to be a major factor in this trend. People aren’t tied to offices as much anymore and that opens up a whole new world of possibilities. We're realizing that we can have a lower cost of living, more space and still be able to head into the city when we need to. It’s like finding a hidden gem that was always there, but we never had a reason to explore it fully.

Zillow's Top 10 Most Popular Housing Markets of 2024

Zillow, a major name in real estate, analyzes user data like page views, home value growth, and how quickly properties sell, to figure out where people are most interested in buying. The results give a great snapshot of the current housing market. Based on their analysis, here are the top 10 most popular markets this year:

  • Manchester, New Hampshire
  • Rockford, Illinois
  • Stamford, Connecticut
  • Columbia, Maryland
  • Bridgeport, Connecticut
  • Allentown, Pennsylvania
  • Peoria, Illinois
  • New Haven, Connecticut
  • Waterbury, Connecticut
  • Sunnyvale, California

As you can see, the Northeast continues to be quite popular, taking up a majority of the top spots, which is fascinating. The Midwest also shows a lot of interest and it's notable that only one West Coast market made the list. It shows that people are looking for alternatives. The West Coast is beautiful, I agree but for a while it has been notoriously expensive.

Manchester, New Hampshire: The Most Popular Overall

Let's talk about the overall winner – Manchester, New Hampshire. I'm not surprised it’s so popular! It's the largest city in the state and has been attracting the interest of many home shoppers. What's even more interesting is that this city has seen a 7.3% jump in typical home values within the last year, now sitting at $415,000. For all its growing appeal, it's still more affordable than other cities such as Boston. Many buyers from outside of Manchester have been looking to relocate there. This tells me that it's not just locals driving the market, it's people from all over seeking a change of scenery.

Diving Deeper: Regional Favorites and Specialized Markets

Okay, so we know the most popular overall spots but what about the types of markets? Let's check out how things are trending in different categories.

Most Popular Large City: Toledo, Ohio

Toledo, Ohio, has won the top spot for most popular large city! With a typical home valued at around $121,000, it is clear that affordability is a major attraction. Located near Lake Erie, it has an appealing mix of nature and cultural attractions, such as a thriving art scene. It seems like this city has a lot of potential. San Jose, California, and Wichita, Kansas, also secured spots in the top three in this category. I can totally understand why people are finding these cities interesting, they all offer something different.

Most Popular Small Town: Elizabethtown, Pennsylvania

Elizabethtown, Pennsylvania, is the most popular small town. It is a lovely town with only 12,000 residents, featuring charming streets, shops and parks. If you are looking to buy here, you have to be quick because houses are selling within five days! Small towns in the Midwest are also quite popular including Vermilion, Ohio; Roscoe, Illinois; and Twinsburg, Ohio. For someone like me who likes a smaller and quieter setting these towns sound really attractive.

Most Popular Coastal City: Milford, Connecticut

Milford, Connecticut, takes the title of most popular coastal city with its 17 miles of coastline along Long Island Sound. It has all the attractions for people who like beaches and boating. West Haven, Connecticut, and South Portland, Maine, are also popular coastal cities. It’s definitely clear that there is an enduring appeal to coastal living.

Most Popular Vacation Town: Portland, Maine

Portland, Maine is the most popular vacation town. It is located on a peninsula extending into Casco Bay and known for its art, architecture, and seafood. It is not really surprising that it’s such a hit with people who want to get away to the coast. Other East Coast towns like East Haven, Connecticut, and Newport, Rhode Island, also made it on the list, showing that the East Coast dominates the most popular vacation towns.

Most Popular Retirement City: Pahrump, Nevada

Pahrump, Nevada, 50 miles away from Las Vegas, has made it to the top as the most popular retirement city. I can see why. It has a warm climate and a significant population of people aged 65 and older. It seems to be a really good fit for retirees. Last year's number 1 retirement city, Pinehurst, North Carolina, is now in the second position.

Most Popular College Town: Normal, Illinois

Normal, Illinois, is the most popular college town. It is home to the Illinois State University Redbirds. Kent, Ohio, is in second place for the second year in a row. Other popular college towns include San Luis Obispo, California, Charlottesville, Virginia, and La Crosse, Wisconsin. It is great to see how these different types of towns attract different types of people!

Most Popular Cities by Geographic Region

Zillow's analysis also looked at the most popular cities by geographic regions. This is very interesting because it can show us what's trending in a wider geographical sense. Here are the regional winners:

  • Northeast: Manchester, New Hampshire
  • West: Sunnyvale, California
  • Midwest: Rockford, Illinois
  • Southwest: Rio Rancho, New Mexico
  • Southeast: Cary, North Carolina
  • Mountain Region: Fort Collins, Colorado

It's nice to see how popularity is spread out, and it's not all concentrated in one area.

What Does This Mean for You? Some Final Thoughts

So, what does all this data mean for you and me? Well, it's clear that the housing market is changing, and so are people's preferences. The rise of exurbs is a signal that the work-from-home shift has had a lasting effect on where people are choosing to live. It's also interesting to see that people are looking for affordability, different types of lifestyles and experiences whether that's in coastal towns, vacation towns, retirement or college towns. I personally find this trend very encouraging. It shows that we’re more flexible, and are choosing to live in places that suit our needs rather than just being tied to major city hubs.

If you're thinking about making a move, this data can give you an idea of what's trending and some locations that are worth checking out. However, remember that the “most popular” isn't necessarily the “best” for you, so be sure to do your own research and pick a place that is suitable for your own unique preferences and circumstances! I also recommend talking to local real estate experts who know the areas very well.

In Conclusion

The most popular housing markets of 2024 are showing a clear shift towards smaller cities and exurbs. Manchester, New Hampshire is leading the charge, but there is also popularity spread across various other cities, showcasing diverse lifestyle preferences. These changing trends are driven by factors such as increased hybrid work models and a growing interest in affordability. Keep this information in mind if you're planning on making a move soon, and happy house hunting!

Work with Norada, Your Trusted Source for 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

 

Home Sales Soar in November 2024 With Highest Jump Since Mid-2021

by

Yes, you heard it right! Existing-home sales surged 4.8% in November, marking the most significant year-over-year increase since June 2021. This is a pretty big deal if you've been keeping an eye on the housing market, and it could indicate some exciting shifts are underway. I know I've been watching these numbers closely, and I'm here to break down exactly what this means for you, whether you're a buyer, seller, or just curious about the real estate world.

Home Sales Soar in November 2024 With Highest Jump Since Mid-2021

The Numbers Behind the Headlines

Let's get down to the nitty-gritty. According to the National Association of Realtors® (NAR), existing-home sales, which include single-family homes, townhomes, condos, and co-ops, jumped up to a seasonally adjusted annual rate of 4.15 million in November. This 4.8% rise from October is a welcome change but more importantly, it's a 6.1% climb compared to November of the previous year. That's the biggest jump we've seen in a while!

To put it into perspective, back in June 2021, we saw a whopping 23% year-over-year increase, but lately things have been much more subdued. So, this recent jump is definitely something to pay attention to.

  • November 2024 Existing Home Sales: 4.15 million (seasonally adjusted annual rate)
  • Month-over-Month Change: Increased 4.8% from October
  • Year-over-Year Change: Increased 6.1% from November 2023

Key Takeaway: Home sales are not just bouncing back, they are showing some real upward momentum.

What's Driving This Increase?

So, what’s fueling this resurgence? According to NAR’s Chief Economist, Lawrence Yun, a few factors are in play:

  • Job Growth: A growing economy means more people are employed, and with a steady paycheck, the dream of homeownership becomes a reality.
  • Increased Housing Inventory: The number of homes for sale is slowly ticking up, which gives buyers more options and a bit more negotiating power.
  • Mortgage Rates Stabilizing: While mortgage rates are still higher than we saw a few years back, they’ve settled into a new range between 6% and 7%, which people seem to be adjusting to.

I think it’s that “new normal” idea that's really crucial here. After the wild ride of the past few years, buyers and sellers are getting a better grasp on what's realistic in this market. We’re seeing more people jumping in because they are ready and have adjusted their expectations.

Inventory & Prices: What You Need to Know

Now let's talk about the homes themselves. While sales are up, the available inventory of homes is a bit of a mixed bag.

  • Inventory Levels: At the end of November, there were 1.33 million homes on the market. That’s a 2.9% dip from October, but a 17.7% jump compared to the same time last year. So, while there are still more choices for buyers compared to last year, the month-over-month drop could suggest that things are moving pretty quickly, and buyers may still need to act decisively.
  • Months' Supply: Currently, the market has about a 3.8-month supply of homes at the current sales pace. This is down from 4.2 months in October but up from 3.5 months in November 2023. A balanced market usually sits around a 6-month supply, so we're still leaning towards a sellers' market, but the situation is less skewed now than last year.

Median Home Prices: It is hard to miss the fact that prices are up. The median existing-home price in November was $406,100, which is a 4.7% increase compared to November 2023. And get this: this marks the 17th consecutive month of year-over-year price increases. That means home values have been steadily climbing, making it a good time for some homeowners who might want to sell.

Regional Price Differences: It is also interesting to note that all four major regions in the US saw price increases. However, the Northeast experienced the highest median price jump of 9.9%, reaching $475,500, while the West’s median price was the highest at $628,200. The Midwest stood at $302,000 and the South at $361,300.

Who's Buying and How Are They Paying?

It is not just the total sales numbers that are important; we must also see who is participating in this market. Let's take a closer look:

  • First-Time Buyers: They made up 30% of sales in November, up from 27% in October. However, this is slightly down from the 31% we saw in November 2023. The real kicker is that the annual share of first-time buyers in 2024 hit a historic low of 24%. This suggests that first-time buyers might still be struggling to enter the market despite some improvements.
  • Cash Buyers: Cash sales accounted for 25% of transactions, which is a slight decrease compared to 27% in both October 2024 and November 2023. This could indicate that more people are relying on mortgages again as rates have slightly stabilized.
  • Investors and Second-Home Buyers: This group made up only 13% of sales, which is down from 17% in October and 18% in November 2023. I think this indicates that the focus is shifting back to primary homeowners rather than investors looking to scoop up properties.
  • Distressed Sales: Foreclosures and short sales accounted for a very small portion of the market, just 2%. This remains consistent with last month and the previous year.

Mortgage Rates: A Key Piece of the Puzzle

Mortgage rates play a massive role in all of this. As of December 12, the average 30-year fixed mortgage rate was at 6.6%, according to Freddie Mac. It was 6.95% a year ago, so we are seeing rates trending down slightly, which makes buying more affordable for some.

  • Current 30-Year Fixed Rate (as of Dec 12): 6.6%
  • One Week Prior: 6.69%
  • One Year Prior: 6.95%

I feel that even the slightest dips in interest rates can give potential buyers that extra bit of confidence to take the plunge.

Regional Trends: Where Are Sales Booming?

The growth in sales wasn't uniform across the country. Here's how each region performed:

  • Northeast: Existing-home sales in the Northeast saw a big jump of 8.5% from October, reaching an annual rate of 510,000, and they're up 6.3% from November 2023.
  • Midwest: In the Midwest, sales increased by 5.3% from October to an annual rate of 1 million, and they are also up 5.3% compared to last year.
  • South: The South saw a 5.6% increase in sales from October, hitting an annual rate of 1.87 million, which is a 3.3% increase from a year ago.
  • West: The West saw no change in sales from October, remaining at an annual rate of 770,000, but they are up a whopping 14.9% from November 2023, the largest Y-o-Y jump.

Regional Sales Comparison

Region November Sales (Annual Rate) MoM Change YoY Change Median Price YoY Median Price Change
Northeast 510,000 8.5% 6.3% $475,500 9.9%
Midwest 1,000,000 5.3% 5.3% $302,000 7.3%
South 1,870,000 5.6% 3.3% $361,300 2.8%
West 770,000 0.0% 14.9% $628,200 4.0%

It is clear from these numbers that the West is experiencing the highest Y-o-Y sales growth, but the Northeast is seeing the biggest price appreciation.

What Does This Mean for You?

If you are thinking about buying or selling, all this can be a lot to take in. Here is my quick summary, based on my understanding:

  • For Buyers: While inventory is a bit tight in some places, there are definitely more homes available than there were last year, and prices are still going up. It's time to weigh your options carefully, get pre-approved for a mortgage, and be ready to move quickly when you find a place you love. Don't get discouraged by a high interest rate. If you're going to live in the home long term, you can always refinance when the rates go down.
  • For Sellers: It’s still a good time to sell, as prices continue to climb. If you have been waiting, now might be a good time to consider listing your property, especially in regions like the Northeast where prices are spiking.
  • Overall: The market is showing signs of stability and growth, but it's still a very dynamic environment. I think it's critical to stay informed and work with a qualified real estate professional who knows the market.

My Final Thoughts

Personally, I'm finding these recent housing market trends quite intriguing. The increased sales, combined with the steady price growth, suggests we're moving into a more stable phase after the turbulence of the past couple of years. The market is showing signs of balance, which could lead to a healthier and more sustainable housing environment in the long run. The slightly reduced interest rates, along with growing employment numbers, have started to play their part.

I hope this in-depth look at the latest housing market data has been insightful for you. It is so important to stay updated and to understand what these numbers mean for your personal goals.

Work with Norada, Your Trusted Source for 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

 

Existing Home Sales Predicted to Remain at 30-year Low in 2025

by

If you've been following the housing market, you know it’s been a bit of a rollercoaster lately. It feels like we’re all holding our breath, waiting for things to change, especially if you're hoping to buy or sell a house soon. I’ve been watching these trends closely, and honestly, the latest news is a bit sobering. According to Fannie Mae's Economic and Strategic Research Group, existing home sales are expected to stay near their 30-year lows throughout 2025. Yep, you read that right.

Now, before you panic, let’s break down what this actually means, why it’s happening, and what you can expect if you're navigating this tricky market. I'll also throw in my two cents based on what I'm seeing out there.

Existing Home Sales Predicted to Remain at 30-year Low in 2025

What Does “Near 30-Year Lows” Really Mean?

First off, let's put this into perspective. Thirty years ago, in the early to mid-1990s, the housing market was a completely different beast. Mortgage rates were higher, and home prices were considerably lower than they are today. When we say “near 30-year lows,” we’re talking about a significant slowdown in the number of existing homes being sold compared to the last three decades. Basically, fewer people are selling their homes, and fewer people are buying them.

This means less movement in the market overall. Fewer opportunities for sellers to make a quick move and fewer options for buyers looking for their dream home. It paints a picture of a housing market that's, well, stuck.

Why Are We Stuck?

So, what's causing this standstill? Well, there are a few key factors at play, and they’re all interconnected like a messy ball of yarn.

  • The “Lock-In” Effect: This is a big one. A lot of current homeowners have low mortgage rates – think 3% or even lower – from when the rates were at rock bottom. The thought of trading that in for a 6% or higher interest rate is a tough pill to swallow. This keeps people put. It’s like they are “locked-in” to their current homes, and they’re not eager to give up that low rate. This results in fewer homes hitting the market.
  • High Mortgage Rates: Even though rates are predicted to decline modestly, the fact that they are expected to stay above 6% is a major hurdle. The cost of borrowing money is still high, which means higher monthly payments for homebuyers. This immediately pushes many buyers out of the market altogether, especially first-time buyers. In my experience, I've seen many families postpone their home buying plans because of this.
  • Affordability Issues: It's not just the mortgage rates. Even if rates dipped a bit, home prices are still elevated in many areas. This combination of higher prices and high interest rates makes buying a home incredibly challenging. As Fannie Mae also notes, supply is still below pre-pandemic levels. It's a perfect storm of factors making it hard for many folks to get their foot in the door of homeownership.

Fannie Mae's 2025 Housing Market Predictions in Detail

Let's dig a little deeper into what Fannie Mae is predicting. They've laid out a few key trends to watch in 2025. Here’s a breakdown of their predictions and my take on each:

  • Modest Decline in Mortgage Rates: They predict that mortgage rates will decrease slightly, but they will stay above 6%, with periods of volatility. This volatility is key to watch. Even with average higher rates, temporary drops might offer brief windows for buyers to jump in. As a real estate watcher, I think it’s crucial for those in the market to stay vigilant and be ready to move when those dips occur.
  • Existing Home Sales Remain Near 30-Year Lows: This is the big one we’ve been talking about. The “lock-in” effect and affordability issues, they are all converging to keep activity subdued. We’re not expecting some massive wave of homes hitting the market anytime soon.
  • New Home Sales as a Bright Spot: Here's a bit of good news. New home sales are expected to be stronger. Builders are actively targeting first-time homebuyers with new offerings. If you are open to new construction, that's something you can explore. But keep in mind this is limited to areas where building is possible and affordable.
  • Decelerating National Home Price Growth: Fannie Mae predicts that national home price growth will slow down. While this doesn't mean a massive price drop, it could offer a bit of relief to buyers. I think this slow down is more of a return to normalcy and should be welcomed. It gives a bit of breathing room to the market.
  • Multifamily Housing in a Holding Pattern: The multifamily housing sector, like apartments and rentals, is expected to remain stable. This is an area I think needs more attention because with fewer options to buy, rental becomes the only choice for many.

A Closer Look at Regional Differences

It's critical to understand that the housing market is not uniform. What’s happening in one area might be totally different in another. Fannie Mae points out some big regional differences:

  • The Sun Belt: This is where construction has been active, and builders are focusing on first-time homebuyers. I've noticed more activity here with more development being built that’s creating an option to purchase new construction. You might see a little more movement in this market compared to other areas.
  • The Northeast: This area is expected to remain constrained. Supply is already low and there is less room for new construction. This means prices might be stickier and competition for existing homes will likely remain high. This is a common experience for those of us who've been watching the northeast closely.

A Glimmer of Hope: Wage Growth

One encouraging thing I am seeing is Fannie Mae's mention that nominal wage growth is expected to surpass home price growth in 2025. This hasn't happened in over a decade. This means that, slowly but surely, people might see their income finally catch up to the price of housing. This could offer some much-needed relief to potential homebuyers, but it won't be an overnight fix.

What This Means For You

So, how should you interpret this data? Here's my take on it:

If you're a potential buyer:

  • Be Patient and Vigilant: Don’t expect a drastic market change overnight. Keep an eye out for those temporary dips in mortgage rates and be prepared to act fast.
  • Consider New Construction: If your area has new construction happening, explore these options. Builders are trying to lure in first time buyers with incentives, so you could find a good deal.
  • Be Flexible on Location: If you can be flexible with your location, you might find more opportunities in areas that have more supply.
  • Budget Carefully: It's even more critical than ever to budget realistically and understand your long-term financial obligations.

If you're a potential seller:

  • Realize It's a Slower Market: Don’t expect your home to fly off the shelves immediately. You may need to be more patient.
  • Price Competitively: With a constrained market, pricing accurately is key. Don't overprice your home, or it may sit for months.
  • Consider Timing: If you can, timing your sale to coincide with periods of lower mortgage rates could help attract buyers.

For everyone else:

  • Stay Informed: It’s crucial to stay updated on the latest market trends, especially if you’re thinking about a move in the near future. Things can change quickly, and staying informed can help you make better decisions.
  • Prepare: Whether you’re a buyer or a seller, preparation is vital. Look at all your financial details and get pre-approved if you are thinking of purchasing.

My Final Thoughts

As someone who follows the housing market closely, I can tell you that these are challenging times. But, knowledge is power. Knowing what to expect can help you navigate these challenges more effectively. The housing market is complex, and it's important to look at data, consider your own local situations, and adjust your expectations. I believe that the market will eventually turn around, but it may be a while before we see a big shift.

Here’s a summary of the data we discussed:

Prediction Detail My Take
Mortgage Rates Modest decline, but above 6%, with volatility Watch for temporary dips for opportunities
Existing Home Sales Near 30-year lows Don't expect a rapid market rebound
New Home Sales Stronger than existing homes Explore new construction if possible
National Home Price Growth Decelerating A welcome return to normal
Multifamily Housing Remains in a holding pattern More attention is needed to alleviate stress for those who can't buy
Regional Differences Sun Belt stronger, Northeast constrained Understand your local market conditions
Wage Growth Expected to outpace home price growth A positive sign for potential buyers, but gradual relief

The data from Fannie Mae paints a picture of a market that's sluggish and will likely remain so through 2025. The combination of high mortgage rates, affordability issues, and the lock-in effect are all contributing to a constrained housing market. While things may change slowly over time, it's clear that we're in for more of the same for now. I hope this in-depth view of the market will help you in making a decision with your home buying and selling needs.

Partner with Norada, Your Trusted Source for 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.

Reach out to our investment counselors:

(949) 218-6668 | (800) 611-3060

Contact Us Today

 

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

by

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

by

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.

Las Vegas Real Estate Forecast Next 5 Years: 2025-2029

by

Las Vegas real estate is a dynamic market that attracts both investors and homeowners looking for opportunities in the sun. The Las Vegas real estate forecast for the next five years promises a mix of challenges and opportunities, shaped by various economic factors, housing supply dynamics, and evolving buyer preferences. Understanding these trends can guide potential buyers, sellers, and investors in making informed decisions in this vibrant market.

The Las Vegas Real Estate Forecast for the Next 5 Years

📈
Key Takeaways for Las Vegas Real Estate Forecast:
  • 📇 2024: Stabilization expected, driven by relatively low interest rates.
  • 📉 2025: Increasing housing supply will lead to moderated price hikes.
  • 💸 2026: Economic growth to drive home value appreciation despite rising interest rates.
  • 🏠 2027: Continuous growth in supply, offering more options for buyers and fostering diverse housing types.
  • 📆 2028-2029: Market consolidation, with stable prices and evolving buyer demographics.

The Current State of the Las Vegas Real Estate Market

Before diving into the forecast, it’s essential to understand the current state of the Las Vegas real estate market. Over the past few years, Las Vegas has emerged as a hotspot for real estate investments due to its relatively low cost of living, booming jobs market, and a steady influx of new residents. According to the latest reports, the median home price in Las Vegas has seen considerable growth, reflecting the high demand outpacing supply.

  • Current Median Home Price: Approximately $420,000 , which is indicative of a strong recovery from the economic disruptions caused by the pandemic.
  • Market Activity: Homes are selling faster, with many listings receiving multiple offers, showcasing an active buying environment.
  • Rental Market Trends: The rental market continues to thrive, with strong demand for both short-term and long-term rentals, further supported by tourism and the gig economy.

Forecast for 2024: A Market Stabilizing Post-Pandemic

As we look at 2024, the Las Vegas real estate market is predicted to experience a balancing act. After the tumultuous effects of the COVID-19 pandemic, the market is stabilizing. According to Bankrate, interest rates are expected to remain relatively low compared to historical standards, encouraging buyers to enter the market. However, housing supply may be limited, maintaining pressure on home prices.

  • Median Home Price: Expected to hover around $430,000, a slight increase from previous years but showing signs of stabilization.
  • Market Activity: Increased interest from out-of-state buyers is anticipated, particularly from California, due to high prices and tax burdens in their home state.
  • Construction and Development: The ongoing construction of luxury condominiums and single-family homes is expected to result in more premium listings entering the market, further diversifying home options.
  • Rental Market: Demand for rentals remains strong, particularly for multi-family units, driven by an influx of new residents seeking affordable housing options.
  • Buyer Demographics: Millennial and Gen Z homebuyers are expected to make up a significant proportion of the market, influenced by their preferences for technology integration in homes and sustainable building practices.

Forecast for 2025: Supply Increases and Price Adjustments

In 2025, forecasts indicate a gradual increase in housing supply. Analysts speculate that new constructions will rise by about 5%, helping to ease the tight inventory that has characterized previous years.

  • Price Shifts: Home prices might increase at a slower rate of approximately 3%, reflecting a more balanced relationship between supply and demand. This moderation will be crucial as potential buyers look for affordability in a competitive market.
  • Investment Opportunities: With more properties entering the market, investors may find emerging opportunities in both single-family homes and rental properties.
  • Economic Influences: The local economy’s growth, driven by tourism, entertainment, and tech industries, is likely to bolster real estate investments and economic confidence among buyers.
  • First-Time Homebuyers: This group is expected to be particularly active in 2025, as slightly more affordable homes become available due to the predicted supply increases.

Forecast for 2026: Continued Growth and Market Correction

The year 2026 is expected to be pivotal for the Las Vegas real estate market. The anticipated 7% increase in housing supply could lead to a more competitive market for buyers.

  • Economic Factors: If economic conditions remain favorable, including stable job growth and population increases, we can expect home values to continue appreciating, albeit at a moderated pace. A potential rise in interest rates will also test the resilience of the buyers’ market.
  • Greater Variety in Home Types: The market may see a diversification in available property types, including more suburban developments and mixed-use communities, attracting a variety of buyers ranging from families to retirees.
  • Affordability Issues: While prices will still rise, affordability may become a concern for many potential buyers, especially first-time homeowners. Strategies such as federal loan programs or state-level incentives might gain traction to support these buyers.
  • Shift to Sustainable Homes: Increasingly, buyers may seek environmentally friendly homes, which could create niches for developers focusing on energy-efficient building practices.

Forecast for 2027: Maturing Market Dynamics

By 2027, the Las Vegas real estate market is projected to mature further, as new residential developments come to fruition. An 8% increase in available housing may provide a much-needed buffer against the previously high prices, allowing new buyers easier access to the market.

  • Rising Rent Costs: As more sales infiltrate the market, rental prices are also expected to rise, leading to potential implications for affordability in the rental sector. Increased rental demand may drive developers to focus on building more multi-family units.
  • Long-Term Investments: By this time, numerous developments will have had time to stabilize, so long-term investors may have clearer insights into the performance of luxury versus affordable segments.
  • Market Feedback Loop: Any downturn in the economy could quickly be reflected in the housing market, requiring investors and homeowners to remain vigilant regarding external economic pressures.

Forecast for 2028-2029: Market Consolidation and Economic Shifts

Looking ahead to 2028 and beyond, the Las Vegas real estate market may see a consolidation phase, with trends normalizing following the supply surges of previous years. The housing prices might stabilize further, reflecting the market's maturation.

  • Long-Term Projections: By 2028, home prices may reach a plateau, with forecasts suggesting that the average price could stabilize around $475,000.
  • Changing Buyer Preferences: As demographic shifts continue, newer generations will have different homeownership aspirations, potentially leading to lifestyle-oriented communities that prioritize amenities and accessibility.
  • Investment and Development Trends: Investors may shift their focus towards emerging neighborhoods that show signs of future appreciation or revitalization, capitalizing on the trends of young buyers moving to urban areas.
  • Technological Integration in Homes: Smart home technology will likely play an essential role in attracting buyers, pushing developers to include these features as standard practice.

The Future of Las Vegas: Key Considerations for Buyers and Investors

As we analyze what lies ahead in Las Vegas real estate, several critical factors will help shape the market landscape.

  • Demographic Shifts: Analyzing migration trends will reveal the best opportunities for investment. As professionals continue to relocate due to remote work flexibility and a desire for lifestyle upgrades, areas that provide community comforts will likely see an increase in demand.
  • Economic Development: Tracking advancements in local industries, such as technology and entertainment, will be essential for understanding economic health and potential real estate appreciation.
  • Legislative Changes: Future housing policies and regulations could impact the market significantly. Staying abreast of new laws about home buying and rental regulations can provide valuable insight into future investment potentials.

Conclusion: Preparing for Your Real Estate Journey

In conclusion, the Las Vegas real estate forecast for the next five years anticipates a robust recovery and gradual stabilization of the market. Those interested in buying, selling, or investing in Las Vegas real estate should consider the emerging trends and economic indicators outlined above. Engaging with local real estate experts and staying updated on market conditions will help you navigate this evolving marketplace effectively.

Cheapest Florida Beach Vacations for 2025: Affordable Beaches

by

Florida, the Sunshine State, is renowned for its stunning beaches, warm climate, and inviting waters. For those looking to enjoy these natural wonders without a hefty price tag, there are numerous affordable beach vacation options throughout the state. Here's a guide to some of the most budget-friendly beach destinations in Florida that promise a relaxing retreat without draining your wallet.

10 Cheapest Florida Beach Vacation Destinations

1. Amelia Island:

Offering a serene escape, Amelia Island is a place where you can enjoy seashell collecting on its white-sand beaches or explore the historic downtown area. The island is also home to Fort Clinch State Park, which provides a glimpse into Civil War history, and the picturesque Boneyard Beach at Big Talbot Island State Park.

  • Historic Charm: Explore the rich history at Fort Clinch State Park and the charming downtown area.
  • Natural Beauty: Enjoy the unique sights at Boneyard Beach and the diverse wildlife.
  • Relaxation: Perfect for peaceful beach strolls and seashell collecting along pristine shores.

Best Time to Visit: The charm of Amelia Island can be enjoyed year-round, but the ideal time to visit is from February to May or October to December. During these periods, you'll find pleasant weather and fewer crowds.

2. Sanibel Island:

Known as the “Shelling Capital of the World,” Sanibel Island is a haven for those who enjoy combing the beach for colorful seashells. The island maintains a small-town charm and offers access to the JN Ding Darling National Wildlife Refuge and the unspoiled shores of Lovers Key State Park.

  • Shelling: A paradise for shell collectors, with beaches full of treasures from the sea.
  • Wildlife Refuge: Visit the JN Ding Darling National Wildlife Refuge for a glimpse into local habitats.
  • State Parks: Discover the natural splendor of Lovers Key State Park's untouched beaches.

Best Time to Visit: April and May are the sweet spots for visiting Sanibel Island. Post-peak season brings minimal crowds, affordable hotel prices, and great weather in the low 70s to mid-80s.

3. New Smyrna Beach:

A local favorite, New Smyrna Beach boasts wide, white-sand beaches and a variety of budget-friendly activities. Visitors can enjoy sidewalk cafes, shopping, and outdoor adventures like fishing and hiking. The Marine Discovery Center offers insights into the area's marine life, adding an educational twist to your beach vacation.

  • Beach Activities: Offers wide, sandy beaches ideal for sunbathing, building sandcastles, and surfing.
  • Local Culture: Enjoy the artsy sidewalk cafes, boutiques, and a friendly small-town atmosphere.
  • Marine Education: The Marine Discovery Center provides an opportunity to learn about the local marine ecosystem.

Best Time to Visit: For ideal weather, visit between October 15th and May 6th. You'll enjoy mild temperatures and a lower chance of precipitation, perfect for beach activities.

4. Cocoa Beach:

This coastal town is a hit among budget travelers thanks to its beautiful beaches and laid-back vibe. Cocoa Beach provides affordable accommodations and dining options, with attractions like the Cocoa Beach Pier and the Thousand Islands Conservation Area offering free entertainment.

  • Surfing Hub: Known for its excellent surf conditions and laid-back surf culture.
  • Family-Friendly: The Cocoa Beach Pier and Thousand Islands Conservation Area offer activities for all ages.
  • Space Coast: Proximity to the Kennedy Space Center adds a unique aspect to your beach vacation.

Best Time to Visit: The best times to visit Cocoa Beach are from October 29th to April 15th. You'll escape the summer heat and enjoy comfortable weather for all beachside fun.

5. Daytona Beach:

Famous for its long stretches of sandy beaches and as a hub for motorsports, Daytona Beach is also a great spot for budget-friendly beach vacations. The area is filled with affordable accommodations and offers plenty of activities, from beachside fun to cultural attractions.

  • Motorsports: Home to the Daytona International Speedway, with events throughout the year.
  • Beach Drives: One of the few places where driving on the beach is permitted.
  • Entertainment: A variety of amusement parks, water parks, and cultural venues to explore.

Best Time to Visit: March to May is the prime time for Daytona Beach, avoiding the crowded Speedweeks and enjoying the pleasant 70s during the day.

6. Clearwater Beach:

With its crystal-clear waters and vibrant beach scene, Clearwater Beach is a destination that combines relaxation with entertainment. The area is known for its marine aquarium, beachfront promenade, and a variety of water sports.

  • Vibrant Atmosphere: Enjoy the lively beach scene with street performers and local artisans.
  • Marine Life: Visit the Clearwater Marine Aquarium to see marine animals up close.
  • Water Sports: A hotspot for jet skiing, parasailing, and paddleboarding.

Best Time to Visit: Opt for a visit between October and December. This period offers low humidity, fewer tourists, and a variety of holiday events to enjoy.

7. Sarasota:

Sarasota is not only a cultural hub but also a place where you can enjoy gorgeous beaches without spending a fortune. The city's proximity to Siesta Key and Lido Key means you have access to some of the best beaches in the region.

  • Cultural Scene: Offers a rich arts community with galleries, theaters, and live music.
  • Beach Access: Close to the renowned Siesta Key and Lido Key beaches.
  • Botanical Gardens: The Marie Selby Botanical Gardens provide a lush escape from the beach.

Best Time to Visit: Springtime, from March through May, is when Sarasota shines the brightest. Expect perfect beach weather with very little rain.

8. Marathon:

Located in the Florida Keys, Marathon is a city that offers a tropical getaway with a laid-back atmosphere. It's a great spot for fishing, snorkeling, and enjoying the natural beauty of the keys on a budget.

  • Fishing and Boating: Ideal for anglers and boating enthusiasts with its clear waters and abundant marine life.
  • Tropical Getaway: Experience the laid-back island life of the Florida Keys.
  • Nature Trails: Explore the local flora and fauna on the many nature trails available.

Best Time to Visit: November to April is the best time to visit Marathon. The weather is mild, and the crowds are thinner, making it ideal for exploring the natural beauty of the Keys.

9. Naples:

Naples is known for its high-end shopping and dining, but it also offers affordable beach vacation options. The city's public beaches are beautiful and free to visit, making it a great choice for a cost-effective beach holiday.

  • Upscale Shopping: Enjoy window-shopping at high-end boutiques and galleries.
  • Public Beaches: The city's beaches are free, beautiful, and perfect for sunset viewing.
  • Golfing: Naples is known for its world-class golf courses, suitable for all skill levels.

Best Time to Visit: Between March and May, Naples offers ideal beach conditions with daytime temperatures in the 80s and less tourist traffic.

10. Melbourne Beach:

For those seeking a quieter beach experience, Melbourne Beach provides a peaceful setting with fewer crowds. It's an ideal spot for relaxing on the beach or exploring the nearby nature preserves.

  • Tranquility: Offers a quieter beach experience away from the crowds.
  • Nature Preserves: Nearby nature preserves provide opportunities for wildlife spotting and hiking.
  • Surf Fishing: The beaches are ideal for surf fishing, a popular local pastime.

Best Time to Visit: Visit from November 5th to April 29th for the most pleasant weather conditions. You'll avoid the intense summer heat and enjoy your beach time to the fullest.

These destinations offer a mix of tranquility, adventure, and cultural experiences, all while being kind to your wallet. Whether you're planning a family vacation, a romantic getaway, or a solo retreat, Florida's beaches provide an affordable and memorable escape. Remember to check for any travel advisories or restrictions before planning your trip, and enjoy the sun-kissed shores of Florida responsibly. Happy travels!

Blog Posts

Contact

Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
BBB