The housing market has been through its share of ups and downs, but one thing remains uncertain: Will it be a seller's or buyer's market in 2024? In this article, we'll explore the reasons behind this, the advantages it offers to sellers, and the current state of housing inventory.
Is the Housing Market Tipping from Seller to Buyer?
The housing market has been a whirlwind in recent years, with soaring prices and fierce competition favoring sellers. But December's data hints at a potential shift, raising the question: are we entering a buyer's market?
Lingering Seller Strength, But Cracks Appear:
- Prices remain high: According to the National Association of Realtors (NAR), the median existing-home price climbed 4.4% year-over-year to $382,600 in December, marking a record high. This indicates sellers still hold some leverage.
- Inventory grows, but slowly: While unsold homes increased 4.2% from December 2022, they remain scarce, sitting at a 3.2-month supply. This keeps the market competitive for sellers in many areas.
Signs of a Buyer's Advantage:
- Sales slide: Existing-home sales dipped 6.2% year-over-year, the lowest level in nearly 30 years. This suggests buyer demand is cooling, potentially giving them more negotiating power.
- Days on market increase: Properties stayed on the market for 29 days in December, up from 25 days in November. This indicates less urgency from buyers, allowing them to be more selective.
- Mortgage rates stabilize: After a rapid rise, 30-year fixed rates have dipped slightly, potentially making homeownership more affordable for some buyers.
Regional Nuances:
The market landscape varies significantly across the country. While the West saw sales rise in December, the Midwest and South experienced declines. This highlights the need for localized analysis when determining market conditions.
Additional Factors to Consider:
- Economic outlook: A potential recession could further dampen buyer demand, tilting the market more towards buyers.
- Government policy: Policy changes related to housing affordability or mortgage lending could also impact market dynamics.
- Local market conditions: As mentioned earlier, the housing market varies greatly by location. It's crucial to understand the specific trends in your area.
The Verdict?
It's too early to declare a definitive shift. While some indicators favor buyers, sellers still hold advantages in many areas. However, the December data paints a picture of a market in transition, with buyer influence potentially growing.
What does this mean for you?
- Buyers: Be patient and strategic. The market may offer more opportunities, but competition can still be fierce.
- Sellers: Consider current market conditions when setting prices and listing your property.
- Everyone: Stay informed about local market trends and consult with a qualified real estate professional for personalized guidance.
The housing market is constantly evolving, and 2024 promises to be an interesting year. Keep an eye on the data and be prepared to adapt your strategy as the landscape changes. If you're considering selling your home, now is a favorable time to connect with a local real estate agent and make the most of this advantageous market situation.
References
- https://www.nar.realtor/research-and-statistics/housing-statistics
- https://www.realtor.com/research/tag/months-supply/
- https://www.noradarealestate.com/blog/housing-market-predictions/
The first quarter of 2013 is almost over and so far, a few trends have emerged in real estate. These trends are not set in stone, nor can we be sure that they will continue on the same trajectories throughout the rest of the year. As with any other major part of the economy, much of real estate depends on external factors such as employment, interest rates, and general economic conditions.