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California Housing Market Predictions for Next 2 Years: 2025-2026

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Is the California dream still affordable? That's the question on everyone's mind, especially if you're thinking about buying or selling a home here. Looking ahead, the California housing market forecast for the next two years suggests a mixed bag, with some areas seeing price increases, while others might experience a slight dip. The data points toward a cooling trend rather than a full-blown crash, with most of the state experiencing moderate growth. Buckle up as we delve into what experts are predicting and I give you my take on the matter.

California Housing Market Predictions for Next 2 Years: 2025-2026

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Positive Growth

Increased sales and moderately higher prices expected in the California housing market.

💰
Lower Interest Rates

Decreased interest rates and loosening of the “lock-in” effect expected to drive market growth.

🏠
Affordability Challenges

Despite positive trends, affordability is likely to remain a significant challenge in the housing market.

🏗️
Key Factors

The economy and housing supply will continue to play crucial roles in shaping the market landscape.

Key Takeaways
  • Positive outlook with increased sales and moderately higher prices
  • Lower interest rates driving market growth
  • Affordability remains a challenge
  • Economy and housing supply are crucial factors

Good News on the Horizon?

When the California Association of REALTORS® (C.A.R.) released its 2025 California Housing Market Forecast, it offered a glimmer of hope. They predict that both home sales and prices will go up in 2025. Why? Lower interest rates and more homes for sale. Sounds good, right?

  • More Homes Sold: C.A.R. thinks we'll see about 304,400 homes sold in 2025. That's a 10.5% jump from what they expect in 2024!
  • Higher Prices (But Slower Growth): The median home price in California is predicted to hit $909,400 in 2025. That's a 4.6% increase from the expected 2024 median price of $869,500. While prices are still going up, the pace of increase is slowing down, which is good news for buyers.

Why the Change? The “Lock-In” Effect and Interest Rates

One big reason for this shift is something called the “lock-in” effect. Many homeowners have super-low interest rates on their current mortgages. They don't want to sell and buy a new house with a much higher interest rate. This has kept a lot of homes off the market.

But guess what? Interest rates are expected to go down a bit in 2025. This should loosen the “lock-in” effect. More homeowners will feel comfortable selling, which means more homes for sale! And lower interest rates also make it easier for people to buy.

C.A.R. thinks the average 30-year fixed mortgage interest rate will drop from 6.6% in 2024 to 5.9% in 2025. That's still higher than pre-pandemic levels, but it's a move in the right direction. This, combined with increased inventory, is what's driving the positive California housing market forecast for 2025.

What About Affordability?

Okay, so more homes for sale and lower interest rates sound great. But what about affordability? Can people actually afford these homes? C.A.R.'s forecast suggests that housing affordability will likely stay around 16% in both 2024 and 2025. This means about 16% of California households will be able to afford a median-priced home. This isn't great, but it's not getting worse either.

My Take on the California Housing Market Forecast 2025

Having followed the California real estate market for years, I've seen the ups and downs. While I agree with C.A.R.'s general direction, I think we need to be cautious. The economy plays a big role. C.A.R. predicts slower economic growth in 2025.

If the economy weakens more than expected, it could impact the housing market. Job losses and economic uncertainty can make people hesitant to buy homes, even with lower interest rates.

Also, even though more homes are expected to come on the market, California still has a housing shortage. This means there will still be competition for homes, which can drive up prices.

Here’s a handy table showing C.A.R.'s predictions:

Metric 2018 2019 2020 2021 2022 2023 2024 (Projected) 2025 (Forecast)
SFH Resales (000s) 402.6 398 411.9 444.5 343 257.9 275.4 304.4
% Change -5.2% -1.2% 3.5% 7.9% -22.9% -24.8% 6.8% 10.5%
Median Price ($000s) $569.5 $592.4 $659.4 $784.3 $822.3 $814.0 $869.5 $909.4
% Change 5.9% 4% 11.3% 18.9% 4.5% -1% 6.8% 4.6%
Housing Affordability Index 28% 31% 32% 26% 19% 17% 16% 16%
30-Yr FRM 4.50% 3.90% 3.10% 3.00% 5.30% 6.80% 6.60% 5.90%

What Does This Mean for You?

If you're thinking about buying a home in California in 2025, the California housing market forecast 2025 suggests it might be a slightly better time than 2024. Lower interest rates and more homes for sale could give you more options.

If you're a seller, you might also benefit from the increased activity and slightly higher prices.

But remember, this is just a forecast. Things can change. Keep an eye on the economy and interest rates. Talk to a real estate professional in your area. They can give you the best advice for your specific situation.

Home Price Predictions for California Regions in 2025

Zillow, a reputable source for real estate data, has provided some interesting projections for various metropolitan areas in California. These forecasts, based on market trends until the end of October 2024, give us a good idea of where the California real estate market might be headed.

Here's a breakdown, focusing on price changes by percentage for key dates, and some easy-to-understand interpretations of the table below:

California Metro Area Forecasted Price Change by Nov 30, 2024 Forecasted Price Change by Jan 31, 2025 Forecasted Price Change by Oct 31, 2025
Los Angeles 0.2% 0.4% 2.3%
San Francisco -0.4% -1.3% -2.3%
Riverside 0.0% 0.0% 2.9%
San Diego -0.2% -0.7% 2.3%
Sacramento -0.1% -0.6% 0.0%
San Jose 0.2% -0.5% 0.3%
Fresno 0.0% 0.0% 1.8%
Bakersfield 0.2% 0.4% 3.2%
Oxnard -0.2% -0.7% 0.9%
Stockton -0.1% -0.6% 0.4%
Modesto -0.1% -0.3% 1.3%
Santa Rosa -0.3% -0.9% -1.6%
Visalia 0.1% 0.0% 2.1%
Vallejo -0.2% -0.6% -0.5%
Santa Maria -0.1% -0.4% 3.1%
Salinas -0.1% -0.4% 1.3%
San Luis Obispo -0.2% -0.6% 1.1%
Merced -0.1% -0.3% 1.5%
Santa Cruz -0.4% -1.3% -0.4%
Chico -0.1% -0.5% -2.1%
Redding 0.0% -0.2% 0.2%
El Centro 0.3% 0.3% 1.9%
Yuba City -0.1% -0.2% 1.2%
Madera 0.1% 0.3% 2.5%
Hanford 0.2% 0.3% 2.4%
Napa -0.5% -1.2% -1.3%
Eureka -0.4% -1.4% -3.4%
Truckee -0.2% -0.9% -0.9%
Ukiah -0.6% -2.2% -5.8%
Clearlake -0.3% -1.0% -2.2%
Red Bluff -0.2% -0.3% -0.3%
Sonora -0.3% -1.4% -1.8%
Susanville -0.3% -0.8% -1.4%
Crescent City 0.5% 0.9% 1.3%

Key Takeaways from the Data:

  • Mixed Bag: It’s clear that the California housing market isn’t moving in one direction. Some areas, like Bakersfield and Riverside, are expected to see solid growth, while others, such as San Francisco and Eureka, face potential price declines.
  • Early 2025 dip: It appears that the beginning of 2025 may see a bit of a slowdown in prices, with most metro areas seeing either stagnant prices or slight dips. This is particularly true for places like San Francisco and the surrounding Bay Area.
  • Later 2025 Rebound: The end of 2025, however, looks more optimistic. Most regions are predicted to recover and see moderate price increases. This suggests a market that might be pausing for a breather before picking up again.
  • Bay Area Concerns: The Bay Area, especially cities like San Francisco, San Jose, and Napa, are showing signs of weakness. This could be due to high prices and a possible decrease in demand from the tech sector and people moving away from high-cost areas.
  • Growth in Southern California and Central Valley: On the other hand, Southern California and the Central Valley, with cities like Bakersfield, Riverside, and Santa Maria, are expected to do well, possibly due to relatively more affordable prices compared to coastal areas.

Will California Home Prices Drop or Crash?

The big question is: will there be a price drop or, worse, a crash? Based on the data and my own analysis, here's my take:

  • No Crash Likely: I don’t see a major housing market crash on the horizon for California. The predictions point to market corrections and adjustments rather than a catastrophic collapse. The fundamentals of the California housing market, such as high demand and limited supply, still remain strong in many areas.
  • Cooling, Not Crashing: While some areas might see price corrections, especially in early 2025, the overall trend seems to be one of a gradual slowing of growth. This means you're unlikely to see a massive drop in home values across the board.
  • Location Matters: As always, real estate is local. What’s happening in San Francisco will be very different from what’s happening in Bakersfield. If you're thinking of buying or selling, pay close attention to your specific area’s trends.

My Personal Thoughts:

I've been watching the California real estate market for a long time, and one thing I've learned is that it’s resilient but unpredictable. Here are a few thoughts based on my understanding and experience:

  • Interest Rates Play a Big Role: The Federal Reserve’s decisions about interest rates will significantly impact the market. Higher rates make mortgages more expensive, which can cool buyer demand. I’ll be keeping a close watch on how this develops.
  • Tech Sector Impact: The tech industry in the Bay Area has a huge influence on the local housing market. Layoffs and shifts in the tech job market can cause fluctuations in housing demand. The Bay area has been on a roller coaster ride.
  • Migration Patterns: Where people choose to move to and from will impact prices. Many people left San Francisco during the pandemic. If more people move away from high-cost areas, we may see a price adjustment in those regions.
  • Affordability Issues: For many people, the high cost of homes in California is still a challenge. This may put a lid on future price rises. More affordable areas are likely to experience increased interest.
  • Long Term Trends: It is very difficult to predict past 2 years, but the fundamental long term problem of lack of housing in California will continue to underpin the market. The long term outlook continues to be strong.

A Glimpse Into 2026

Predicting the California housing market in 2026 is more speculative, but based on what we’re seeing now, I expect:

  • Continued Moderation: I believe 2026 will continue the trend of moderate growth in some areas and perhaps some slight price adjustments in others. The market should have stabilized by then.
  • Regional Differences: The differences between different regions will become more pronounced. Areas that have corrected will start to recover. The central and southern regions will show the strongest growth.
  • Supply and Demand Imbalance: The underlying imbalance between housing supply and demand will continue. This means that places with limited housing and continued interest will be more competitive.
  • Economic Factors: The state of the economy will have a big impact. A strong job market and a stable economy will support housing growth.
  • Slow and Steady: Don’t expect the kind of explosive growth we saw during the pandemic. Instead, we’ll likely see a slow and steady market that’s more balanced.

Final Thoughts

Navigating the California housing market forecast requires a careful approach. While some areas might see price corrections in the next couple of years, a significant crash is unlikely. Keep your eye on interest rates, local economic conditions, and regional trends. And remember, I am always here to give you my take on the matter, drawing on my experience and analysis. Whether you're looking to buy, sell, or invest, doing your research and having a clear plan is the key to succeeding in this dynamic market.

Las Vegas Housing Market Predictions for the Next 2 Years

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If you're eyeing the Las Vegas real estate scene, you're probably wondering what the future holds. Will prices soar, dip, or stay steady? Well, based on the latest data and my analysis, the Las Vegas housing market is likely to see a mix of minor dips and moderate growth over the next two years. While we shouldn’t expect any dramatic crashes, let’s dive deeper into what factors will likely shape the market through 2026.

Las Vegas Housing Market Predictions for the Next 2 Years: 2025-2026

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Las Vegas Housing Market Insights
  • 🏠 2024-2025 Dip: -0.7% by January 2025
  • 📊 2025 Recovery: +1.1% by October 2025
  • 📅 2026 Forecast: Slow but steady growth expected
  • 💡 Key Factors: Interest rates, inventory levels, and the local economy

Current State of the Las Vegas Housing Market

Before we look into the crystal ball, let's get a snapshot of where we stand right now. As of today, Zillow reports that the average home value in the Las Vegas-Henderson-Paradise area is around $428,725. This is a 5.6% increase over the past year. While that may sound like a lot, it's important to note that the market has been cooling down from its pandemic peak. Homes are currently going to pending in approximately 28 days. This number used to be much lower in the past 2 to 3 years showing a slowdown in demand.

Short-Term Forecast: A Mixed Bag

Now, let's look at what the experts at Zillow are predicting. Their data gives us some valuable clues for the near future. I’ve summarized their data below for better readability.

Region October 2024 Actual Forecasted Change (Nov 2024-Jan 2025) Forecasted Change (Nov 2024 – Oct 2025)
Las Vegas, NV 0% -0.7% 1.1%
Reno, NV 0% -0.4% 0.9%
Fernley, NV -0.1% -0.7% 0.2%
Carson City, NV 0% -0.2% 0.9%
Elko, NV 0.4% 0.4% 0.9%
Pahrump, NV 0.2% 0.2% 2.3%
Gardnerville Ranchos, NV 0.1% -0.4% 0.4%

Here’s what we can gather from this:

  • Minor Dip in Early 2025: Zillow predicts a slight drop of 0.7% in Las Vegas home values between November 2024 and January 2025. This suggests that the market might experience a small correction as we head into the new year. Other areas in Nevada are predicted to see a similar trend, with most areas seeing a decline or no change in this period.
  • Moderate Growth by Late 2025: However, the forecast for the rest of 2025 is more positive. Las Vegas is expected to see an overall increase of 1.1% in home values between November 2024 and October 2025. This suggests the market will slowly recover in the latter half of the year.
  • Las Vegas vs. Other Nevada Cities: When we compare Las Vegas to other cities in Nevada, we see a similar trend of slight decline and then moderate growth, with a few exceptions like Pahrump seeing significantly higher growth. This suggests that the broader state market has similar underlying factors. Elko is also doing a bit better than other regions.

My Personal Thoughts and Analysis

Now, here's where I'll throw in my own two cents. While Zillow's data is valuable, real estate markets are influenced by a myriad of factors, and I believe the next two years will be particularly interesting in Vegas.

  • Interest Rates: The biggest factor influencing the market remains interest rates. With mortgage rates still elevated compared to the last few years, demand will be tempered. If the Federal Reserve starts cutting rates (as many expect), that could provide a boost to buyer activity and might increase demand slightly.
  • Inventory: The amount of homes available for sale also plays a crucial role. If the number of homes on the market increases significantly, it might put downward pressure on prices. If inventory remains limited, prices are less likely to decline sharply. However, from my experience and reading between the lines in data, there are chances of more supply entering the market, especially due to speculative investors who are now looking to exit.
  • Local Economy: Las Vegas is heavily reliant on tourism. A strong local economy, with a high level of employment, always supports a healthy housing market. With the strong job market recently, and new projects lined up, it should help the real estate market.
  • Population Growth: Nevada, and Las Vegas in particular, has been seeing a rise in population over the past few years. This constant demand for housing is another factor to watch out for. This demand is a supporting factor for the rise in prices.
  • Affordability: Let’s face it, Las Vegas isn’t as affordable as it once was. This is the reason why the growth in real estate has slowed down over the past year. I think this is a healthy thing as it gives real buyers time to accumulate enough down payment, and prevents speculative bubbles in the market. If the affordability issue keeps increasing, we may see the demand further cooling down in the future.

Will Home Prices Drop or Crash in Las Vegas?

Okay, the big question: Will home prices drop in Las Vegas? Or even crash? Based on my analysis, the short answer is: a dramatic crash is unlikely. While we might see a slight dip in the beginning of 2025, followed by modest growth, I don't foresee a major downturn.

Here’s my rationale:

  • No Signs of a Bubble: The rapid price increases we saw during the pandemic were unsustainable. The current cooling off is a correction, not a market collapse. There has also been a significant rise in the quality of buyers. Most new buyers are well qualified and are not over-leveraged.
  • Limited Supply: Even though more houses might be entering the market, the existing supply is not enough to trigger a huge price drop.
  • Strong Underlying Economy: The Las Vegas economy seems fairly robust at this time. And if it continues to grow, it will support the housing market.
  • Lending Standards are Tighter: Unlike the 2008 financial crisis, lending practices are stricter now. This means that there aren’t too many people with risky mortgages that could trigger a flood of foreclosures.

A Possible Housing Forecast for 2026

Predicting what will happen in 2026 is tricky, as a lot can happen in that timeframe. However, here's my best guess based on current trends and my experience:

  • Continued Moderate Growth: I expect the Las Vegas housing market to continue on a path of moderate growth. The rapid growth of the pandemic years are over for sure. We might see price gains of around 3 to 5% each year, depending on interest rate movement.
  • Increased Competition: As the market stabilizes and uncertainty reduces, I foresee more buyers entering the market. This might lead to slightly more competition for good quality houses in the best locations.
  • Focus on Affordability: The issue of affordability will likely be a major topic as we move into 2026. If interest rates do not come down in a significant way, and prices rise, then many people will get priced out of the market.
  • Shift in Buyer Preference: More people may look at different types of houses, or locations if they can't afford the more premium properties.

Factors to Watch Out For

  • Federal Reserve Actions: Pay close attention to any announcements made by the Federal Reserve regarding interest rates. This will have a huge impact on the mortgage rates and buyer activity.
  • Employment Data: Keep an eye on the employment data for Las Vegas. A strong job market leads to a stable housing market.
  • New Development: Watch out for new housing developments. Any large new project may impact the supply and demand in the region.
  • Inflation: This is an important factor too. High inflation will lead to high prices, which might eventually cool down demand for real estate.

Final Thoughts:

So, what's the bottom line? The Las Vegas housing market is not in a state of bubble. We are not going to see any dramatic price drops anytime soon. Over the next two years, I believe the market will experience a small correction in the beginning followed by slow and steady growth.

If you are planning to buy, don't try to time the market perfectly, but instead look at houses that you really like, and are in your comfortable budget range. If you are planning to sell, make sure to list your house in an attractive way, and be prepared for more competition. For both buyers and sellers, it's essential to stay informed, consult with professionals, and make informed decisions based on your individual situation.

Remember, real estate is a long-term game. So, don't get swayed by short-term fluctuations. I hope this analysis helps you navigate the Las Vegas housing market with more confidence.

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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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Housing Market Predictions 2025: Will Real Estate Boom?

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Will the housing market explode in 2025? Probably not a full-blown boom, but it's unlikely to be a complete bust either. Expect a mix of modest growth, slightly increased sales, and a bit more inventory. It will likely be a more balanced market, leaning slightly more in favor of buyers than we've seen in recent years.

I know, that's not as exciting as a ‘boom' headline, but it’s a more realistic picture based on the data I've been digging into. Let me explain why, and break it all down for you.

Housing Market 2025: Experts Predict Slower Growth, Not a Boom

2024: A Year of Twists and Turns

To understand what's coming in 2025, we first need to look back at the wild ride that was 2024. It was definitely a year that kept us on our toes, with some unexpected challenges and shifts. If you thought you had it figured out, well, the market probably threw you a curveball! Predictions made at the beginning of the year? Many just didn't pan out.

It was like trying to predict the weather in a hurricane – pretty much impossible.

Here's a quick summary of what made 2024 so unique:

  • Interest Rate Roller Coaster: Instead of the expected decline, mortgage rates unexpectedly surged, hitting new highs and making homes even less affordable. This put a damper on buyer enthusiasm. Even though there was a small dip in September, the volatility made it very tough for people to make plans.
  • Affordability Crisis: Home prices, already sky-high, combined with rising interest rates, property taxes and insurance costs, led to a major affordability crunch. It's not just that houses cost more; people are paying a bigger chunk of their income on housing compared to past years. Think Great Financial Crisis levels – but with less wage growth.
  • Inventory Lock-In: Many homeowners who refinanced at super low rates were hesitant to sell, fearing higher rates on their next purchase. This “lock-in effect” kept housing supply tight, adding to the affordability problem.
  • Creative Solutions: People started thinking outside the box. “House hacking,” like renting out rooms or units in a multi-family property to offset mortgage costs, became more popular, especially with younger buyers. This is just one sign that buyers are very adaptable and will figure out how to navigate tough markets.

What's in Store for 2025?

So, with the background of 2024, let's dive into what 2025 might bring us. This is where different experts and reports start to offer varying perspectives, but let's try and see the bigger picture.

1. Mortgage Rates: The Unpredictable Factor

Okay, let's talk about mortgage rates. They were the main villain of 2024, and they’re going to continue to be a major player in 2025. The million-dollar question is: will they come down?

  • The Optimistic View: The National Association of Realtors (NAR) Chief Economist, Lawrence Yun, is predicting that we might see rates stabilize between 5.5% to 6.5%. They are predicting a slow drop which I think is overly optimistic. This, according to them, would be the “new normal.”
  • My Take (with a dash of skepticism): While I'd love to believe in a big drop in rates, based on what I'm seeing, I'm leaning towards them being more in the 6.5% to 7.5% range, possibly higher for a while. Why am I so cautious? Well, longer-term rates, which really influence mortgages, are tied to things like the 10-year Treasury yield. These yields are determined by market forces – inflation fears, government spending, future economic expectations, etc. The Federal Reserve can influence these, but it doesn't control them completely. Right now, the market isn't showing signs that it expects inflation to disappear soon, and this means mortgage rates may stay elevated.To me it feels like the bond market is still fearful of higher inflation and continued large government deficits which leads to higher interest rates.

Here's a table of the different predictions:

Source 2025 Avg. Mortgage Rate
NAR (Lawrence Yun) 5.5% – 6.5%
Realtor.com 6.3%
My Prediction 6.5% – 7.5%

Remember these are forecasts and can change.

The most important takeaway here? Don't expect a return to the super low rates of the past. Prepare your budget for rates at these levels.

2. Home Prices: More Growth, but Slower

It's unlikely that we'll see a complete collapse in housing prices, but we may see price growth slow down. Here's the gist:

  • Realtor.com Forecast: They're predicting a 3.7% increase in home prices for 2025, which is a bit lower than the 4% they're expecting for 2024. This is mainly because while they see a small drop in mortgage rates they expect inventory to increase. This additional supply will have a downward impact on pricing.
  • NAR Forecast: Yun is forecasting a 2% increase in median home prices for both 2025 and 2026.
  • My Opinion: I do believe that prices will slow in growth, and it's possible that in some overinflated areas we could see prices even decline. I also think that condo prices will likely drop first, as we're already seeing that in places like Denver and some areas in Florida. There is already oversupply in some areas, which means prices will eventually drop due to basic economics of supply and demand.

Here’s a table summarizing the median home price appreciation:

Source 2025 Median Home Price Appreciation 2026 Median Home Price Appreciation
NAR 2% 2%
Realtor.com 3.7% Not Available
My Opinion Slower growth (possibly declines in some areas) Slower growth or stagnation

It is worth nothing here that 2024 price growth was around 4% which is a lot higher than 2023 which was 1.1%.

3. Sales Volume: A Slight Increase

Will more people be buying homes in 2025? The data suggests that a modest increase in sales is possible:

  • NAR: They predict about a 10% jump in existing-home sales in both 2025 and 2026, along with an 11% increase in new home sales in 2025 and an 8% jump in 2026.
  • Realtor.com: They are forecasting that home sales will increase by 1.5% year over year, which would lead to 4.07 million sales for the full year of 2025. This number is significantly lower than the numbers put out by NAR.
  • My thoughts: I am very skeptical about a substantial sales volume increase in 2025. High interest rates and the “lock-in effect” are going to continue to slow down movement in the market. Unless interest rates drop significantly (due to a recession or some other major event) or unemployment surges, the market is likely to remain sluggish. I think the Realtor.com forecast is more realistic. I also think that costs of homeownership like property taxes and insurance are a huge factor that the NAR numbers might be ignoring.

Let’s look at the home sales projections:

Source 2025 Sales Volume (YoY) 2026 Sales Volume (YoY)
NAR 10% 10%
Realtor.com 1.5% Not Available
My Opinion Minimal to Low Increase Stagnant or Slight Increase

4. Inventory: Slowly Unlocking

Good news! We may finally be seeing some relief from the incredibly tight housing supply:

  • The “Lock-In” Loosening: The lock-in effect is starting to show signs of easing as people move due to life events or wanting to tap into their home equity. We're seeing more listings in typically tight markets, like California, and more inventory in Texas and Florida where there's more new construction.
  • Realtor.com Forecast: They're predicting an 11.7% increase in the for-sale inventory for 2025 which is down from 15.2% growth seen in 2024.
  • My Perspective: The increase in inventory is a positive sign, but it's a gradual change. While the peak of the lock-in is likely over, it’s still going to have an impact, especially at the start of 2025. I think, on the whole, we will see a good jump in supply overall compared to the last couple of years, but we’re not going to be back to pre-pandemic levels anytime soon.

5. Affordability: A Continued Struggle

Even with a slower pace of price growth and the possibility of slightly lower interest rates, affordability is going to remain a key challenge.

  • Cost of Ownership: It's not just about the price of the home. Property taxes, insurance costs, and even maintenance expenses are all going up. This means a larger portion of people's income goes toward owning a home.
  • Potential Upsides: Realtor.com points out that a Trump administration might bring tax cuts and other policies which could lead to a small bump in disposable income which would make homes more affordable, however, that remains to be seen.
  • My Thoughts: I do think affordability will continue to be an issue. The good news is that the pressure is not as strong as it was in the past couple of years. The cost of housing as a percentage of income is expected to go down. However, affordability is still way off from historical norms.

6. The Political Wild Card

With a new administration taking office, there's a lot of uncertainty. Here's what's on the table:

  • Trump's Potential Policies: President Trump has talked about things like deregulation, making federal land available for homebuilding, and slashing inflation. Some of these proposals could help with housing supply and even bring down interest rates if he can successfully cut down on inflation.
  • Potential Drawbacks: However, some of his other proposed policies could work against the positive outlook. Tariffs and immigration restrictions could affect the construction industry and increase costs. It's also uncertain how tax cuts and increased government spending will play into inflation.
  • Market Reaction: The markets have already reacted to this by pushing longer-term rates higher, suggesting they are worried about inflation, larger deficits, or stronger economic growth, or even a combination of all three.As I see it, the market is definitely seeing the Trump victory as an indication that there will be a more inflationary environment which would lead to higher interest rates for much longer. How this impacts housing will be something that I'll be watching closely.

Key Takeaways for Buyers, Sellers, and Renters

Okay, after all that, here are some specific tips for you based on what I'm seeing in the data:

For Buyers:

  • Prepare your budget: Don't count on super low rates. Plan for a mid-6% range and make sure you have a good handle on your monthly expenses.
  • Be patient: The market is becoming more balanced, so you might have more time to consider your options. Don't feel pressured to rush into a purchase if something doesn't feel right.
  • Explore creative options: Consider things like house hacking, or equity-sharing if you're struggling with affordability.
  • Get financially prepared: Be ready to jump on a good opportunity if it comes up. Get pre-approved, and have all of your financial documents in order.
  • Be Aware of Realtor Changes: Real estate commissions are now negotiable. Make sure you and your buyer agent have an upfront agreement on compensation.

For Sellers:

  • Price strategically: With more inventory, you may need to be more careful about pricing your home to attract buyers. Don’t price yourself out of the market!
  • Consider incentives: In a more competitive market, offering things like closing costs or rate buy-downs could make your home stand out.
  • Flexibility is key: Be open to negotiating and adjust your strategy to the market conditions.

For Renters:

  • Renting may remain more affordable (for now): In many markets, renting may be the more cost-effective option, especially in the short term.
  • Splitting Costs: If you are trying to save for a down payment, look into splitting rental costs with roommates to build your savings quicker.
  • Consider Location: If you are looking for a cheaper option, renting further from the city center might be an option, or even looking at a less expensive city could be a solution.
  • Tools for evaluating: There are resources like the Realtor.com Rent vs Buy calculator that can help you evaluate your options.

Final Thoughts

So, will there be a housing boom in 2025? Based on all the data, my analysis, and my gut feeling? I doubt it. Instead, I'm expecting a market that's gradually normalizing, where buyers have a bit more power and inventory starts to increase, even while affordability is still an issue. It will be a year of slow change, not a rapid boom. It is going to be an interesting year, and I'll be watching closely to see how the market unfolds.

It's important to remember that real estate is local, and these trends may not apply everywhere. Always do your research and consult with local experts.

And that's where I leave it for now. I hope I've given you a realistic view of the 2025 housing market. It’s a complicated puzzle, but by staying informed, you can make better decisions, whether you're buying, selling, or renting.

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Will Housing Prices Drop in 2025 in California?

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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

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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.

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California Housing in High Demand: 19 Golden State Cities Sizzle

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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

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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!

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

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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.

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

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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.

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