| 2024 Market Predictions: Will Home Prices Drop?
|  | Happy New Year! I hope 2024 is starting off wonderfully. Mine has been a roller coaster of excitement. Today I started to redo my primary bath and I will share the end results in my next newsletter (hopefully it will be done by then).
Before delving into the trends, it's important to say that general market dynamics impact individuals differently based on their personal situations and needs. Therefore, don't hesitate to reach out to me for personalized recommendations tailored to your specific circumstances.
With home values and interest rates still being relatively high, both buyers and sellers are wondering what's going to happen to the market in 2024. Typically, home values increase when demand is high and supply is low. Conversely, prices tend to decrease when the housing supply is high and demand is relatively low. So, what will the conditions look like this year? Let’s look at the latest market trends.
What is the Market Currently Like?
Today's housing market is characterized by high prices, high interest rates, and low supply. While high prices are typically driven by strong demand, the current demand is somewhat normal. Inventory is still low, however, which allows sellers to retain higher prices. Since interest rates and home prices are high at the same time, many potential buyers are finding it difficult to afford a purchase.
Will Interest Rates Drop?
The Federal Reserve has steadily hiked interest rates since March 2022 in order to slow inflation. Interest rates held steady from July through December 2023, with mortgage rates dropping slightly, but what can we expect in 2024?
As inflation has improved in recent months and is projected to continue falling in the year ahead, the Federal Reserve has signaled that we could see several rate cuts in 2024. There is still a possibility of rate hikes, depending on inflation and other economic factors, but so far, the outlook is hopeful. Lower rates would make it more affordable to buy a home.
Will Home Prices Drop?
While home value appreciation is expected to slow down, it's not yet clear if home prices will decrease. Given recent trends, some areas may experience a price increase of around 3-4%, while others may see a drop of 1-2%. Prices are directly connected to housing inventory. Unless there is a considerable increase in inventory, home values will remain high.
Will Inventory Improve?
The number of homes on the market is still relatively low and is showing a declining trend compared to the same time last year. To reach a balanced market, around 5 to 6 months of supply needs to be available at a given time. The current inventory is only enough for a 3.4-month supply. It's believed that inventory levels will improve somewhat in 2024, which could help with home prices. However, it is likely that new home construction will not reach healthy levels until 2025.
All the above indicate that home prices are unlikely to drop significantly in 2024. Until we see any significant changes to interest rates, inventory levels, or home prices, it will remain mostly a seller’s market. The market can change quickly though, so if you’re ever curious about our local conditions or want to discuss how the latest market trends may affect you, reach out anytime.
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| | My Recent Sales, Listings and Buyers Needs | | Just Sold in the Catalina Foothills - Gated Sabino Mountain
$1,600,000 - 7541 E Crested Saguaro - Fabulous clients and a stunning home with gorgeous views. 4 bedroom, 4 1/2 baths with a 3 car garage. I was the original listing agent when my clients bought this home over 20 years ago.
My Listing at Broadway and Houghton - Sonoran Heights
$368,900 - 69 S Shrader Lane - This desirable 4-bedroom home is located in a quiet neighborhood on the East side of Tucson. The split bedroom floor plan offers privacy and space for everyone, while the open kitchen with island and stainless steel appliances is perfect for entertaining. Vaulted ceilings throughout create an airy and spacious feel. Owned solar system ($20,000 value) save money on energy bills (installed 2022) , and the back paved patio with built-in planters and covered porch is the perfect place to relax and enjoy the outdoors. Other features include 2 car garage, lovely window treatments, water softener and reverse osmosis.
My Listing in Central Tucson - Close to St Joseph Hospital
$295,000 - 436 N Sahuara Ave. - Introducing a rare opportunity to build your dream home in the coveted Historic Indian House Community on .55 acres. With the purchase of this lot comes an invaluable package that includes a full set of plans that perfectly complement this lot. A substantial value of at least $100,000 is embedded in the price which incl. a 3063 sqft custom plan, engineering, soil reports, water meter installation, utilities at lot, entry wall and grading efforts. The plans have received the city's seal of approval, streamlining the permitting process. Additionally, the time-saving benefit of a year's worth of progress—the journey to this point has already been expertly navigated. Start construction sooner, bringing your dream home to life faster. Selecting your own finishes allows you to infuse your unique taste.
Coming Soon in Saddlebrooke - Estimated price in the $400's - 2 bedroom plus den
Buyer Needs -
One story home in the Northwest and extended Northwest 2-3 bedrooms, single story, quiet, nice yard and big kitchen over 1700 square feet - Up to $380,000.
Foothills home remodeled or newer with pool, white kitchen, modern feel, views, 3-4 car garage up to $1,200,000
Please reach out to me with any questions. Have a fabulous month! Diane |
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