Shifting Sands: Will the 2024 Housing Market Favor Buyers or Sellers?
The last several years have been like riding a roller coaster in the housing market. Bidding wars, sky-high prices, and scarce homes frustrated purchasers while sellers were overjoyed. However, rumours of things changing are growing stronger. Is 2024 going to be the year when buyers will start to regain control, or will sellers continue their rule?
To get a grip on the shifting sands in the market, one has to consider the following forces at play:
- Rollercoaster Ride: The Federal Reserve’s response to inflation has increased interest rates. It affects mortgage rates directly, making homeownership expensive. Higher rate mechanisms could make a more balanced market with less frenetic activity.
- Affordability Crunch: For many potential buyers, rising house prices and increasing interest rates mean reduced affordability. Many of these potential buyers would not afford such properties, which might demand being slow down, especially by first-time homebuyers, potentially cutting out large segments of prospective customers.
- List: A Flickering Light: In some areas, national inventory levels are gradually inching upward, but sellers still dominate others. With more homes to choose from, there is a little bit of choice for buyers and maybe an opportunity to negotiate the price down for the first time in years. However, “gradually” does not mean “abundantly.”
However, these shifts occur, sellers would still have some key benefits:
- Chronic Inventory Woes: National inventory, though rising, remains low historically. In desirable neighborhoods, seller competition might still be fierce, especially where properties are move-in-ready.
- Solid Underlying Demand: Homeownership continues to be supported by demographic factors such as the millennial generation moving into their prime home-buying years. This underlying demand helps prevent sharp price depreciation.
- Seller Confidence: A Double-Edged Sword Any doubt is brushed off by sellers who have been in control for many years now, resulting in presumptuousness. As a result, they may reject any drastic decrease in offer prices, significantly dragging out the selling duration.
Predicting where the market is going to remain is a task. Let’s go through some scenarios that could happen in 2024:
Scenario 1: Reducing the gap.
This scenario sees a gradual swing towards a fairer market. With increasing interest rates and affordability concerns, certain buyers are discouraged, resulting in either slight slowdowns or price stability. The availability of extra stock allows purchasers to pick what they want and perhaps bargain a little bit. There might be a fall in prices in the pockets with the hottest markets.
Scenario 2: Sellers’ correction begins.
In this scenario, increased interest rates and a more cautious pool of buyers will lead to a significant seller correction. Prices may drop slightly, thus requiring sellers to re-adjust their pricing expectations as well as become more flexible in negotiations. This is more likely to happen in areas with high levels of overvaluation or oversupply.
Scenario 3: A halt in inventory recovery
This scenario has an inventory rise at a less-than-expected rate, allowing seller dominance to prevail. Although buyer demand may slow somewhat because of increasing rates, low inventory levels sustain competition, preventing a major decline in price growth. This is more likely when desirable but has a limited number of new homes being constructed.
Navigating the Uncertainty: Advice for Buyers and Sellers
Whatever happens, both purchasers and sellers are strategic in their approach to the 2024 market.
For Buyers:
- Do Your Homework: Be knowledgeable about your local community. Study its trends, inventory levels, and average closing periods.
- Obtain pre-approvals: Knowing how much money you have will make your bid strong enough to beat others.
- Practice Patience and Persistence: It may take time to find the right house; you may have to attend several open houses. Do not despair!
- Be Adaptable: Make the offer conditions or closing date more enticing than other potential buyers’ offers.
For Sellers:
- Price Competitively: A realistic asking price should reflect current market conditions and recent comparable sales.
- Emphasize the unique selling points of your home: Highlight what makes your property different by emphasizing its strengths and possibilities.
- Work with a Reputable Realtor: Working with a realtor helps understand pricing strategies and negotiations conducted by an experienced agent.
- Be Ready for Negotiation: You might not receive multiple offers above your asking price anymore; however, there must be room for reasonable offers to ease the sale process.
In conclusion,
The twenty-four-year housing market seems to be changing for both buyers and sellers. Sellers may not have as much bargaining power as they used to, but an all-inclusive buyers’ market does not seem probable. The secret to prosperity is keeping updated, adjusting to changes, and using the services of a competent agent who can handle the changing market on your behalf.
