The 2024 real estate market seems hard to predict right now. Let me share with you some of the trends I'm watching. We're used to a very consistent real estate market in Denver and Boulder that is nearly predictable by the week. Right now the market is largely being controlled by interest rates. Every time there is a rate drop lenders see an increase in applications and realtors see an increase in showings. So, our predictable market has another strong influence. Right now what the market feels like to me is like the tide is collecting for a big springtime wave of activity.
Despite the national trend of increasing home prices, there remains a notable concern among some individuals that a decline might be on the horizon. A recent survey by Fannie Mae revealed that 24% of respondents anticipate a decrease in home prices within the next 12 months, indicating a prevalent apprehension shared by nearly one in four individuals.
Let's explore the predictions that experts have made regarding price trends for the current year.
Experts Project an Increase even if it is a Modest Increase:
Check out the latest home price forecasts from eight different sources (see graph below):
In an effort to alleviate this apprehension, experts offer insights into what is anticipated to unfold in the housing market this year. We have been spoiled in Colorado with 10% year over year appreciation. I don't expect that to be the trend for 2024 but a 3.56% appreciation is standard nationwide so we just need to adjust our mindsets. As shown in the graph, experts predict a growth of over 2% in home prices by the year's end – a reassuring indication that prices are expected to rise, not fall.
The probability of prices declining in 2024 is low due to the ongoing scarcity of inventory and the influence of reduced mortgage rates, which are contributing to heightened buyer demand. If you see below this is a chart by price point about how many listings we would need (red bar) in order to get to a balanced market which is considered 6 months of listings. The black bar is the amount of listings we have per price point.
Source: First American Title Statistics
These factors are expected to continue driving prices upward throughout the year, as elucidated by Selma Hepp, Chief Economist at CoreLogic.
“With mortgage rates dropping, demand for homes in early 2024 is likely to be strong and will again put pressure on prices, similar to trends observed in early 2023 . . . Most markets will continue to reach new home price highs over the course of 2024.”
What does this mean for prospective homebuyers and homesellers?
According to experts, the positive outlook on home prices this year is advantageous for those considering homeownership. The expectation of home price appreciation is seen as a positive factor, as it contributes to the accumulation of equity, solidifying homeownership as a lucrative investment over time.
In addition, the projected increase in home prices suggests that delaying a home purchase may result in higher costs later on. Therefore, for those who are prepared and capable, moving forward with a home purchase sooner rather than later is encouraged.
Reach out to Megan Douglas to strategize about your move in the Denver and Boulder areas. I'm happy to use data to show you the most ideal times to buy or sell.
