Meltdown vs. Boom: How Will the 2024 Real Estate Market End?

🌟 Let's do this, the year is half over!

Author

Tim and Julie Harris
July 31, 2024

HARRIS Real Estate Daily

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Lets do this, the year is half over...what does the second half of 2024  hold in surprise and what should you expect for 2025? Buckle up as we dive into the latest trends, facts, and predictions to help you stay ahead of the curve and maximize your success.

1. Current Market Sentiment

  • Fact: Would-be homebuyers are holding their breath for potential rate cuts by the Fed. Transaction volumes for new and existing homes remain low this year, but the silver lining is the rising inventory, which gives buyers more negotiating power.

  • Prediction: If the Fed cuts rates, we could see a surge in buyer activity and an uptick in transaction volumes.

  • Bonus Tip: This is fantastic news for buyers! Expect fewer competing offers, a lower likelihood of going over list price, and no more stress over guaranteeing the appraisal gap. Leverage this to your clients' advantage!

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2. NAR Settlement Implementation

  • Fact: The August 17 implementation date for the NAR settlement is just around the corner. Are you ready? Are your sellers and buyers prepared?

  • Prediction: As the deadline approaches, expect a rush to finalize transactions under the old rules, potentially boosting short-term market activity.

  • Action Plan: Stay frosty with state-mandated and broker-required form changes. Polish your Buyer Presentation and start using it now—don’t wait until the last minute!

3. Existing Home Sales Decline

  • Fact: Existing home sales dropped 5.4% month-over-month and year-over-year to 3.89 million units on an annualized basis. However, the median sales price rose 1.8% month-over-month to $426,900, setting a new record.

  • Prediction: The combination of declining sales volume and rising prices suggests a tightening market, potentially exacerbating affordability challenges for buyers. There are over 1,000 first-time buyer down payment assistance programs available. Are you familiar with them? Make sure your clients are!

4. Market Comparison to 2008

  • Fact: Current sales of previously owned homes are at a pace reminiscent of 2008, the nadir of the Housing Crisis.

  • Prediction: If history repeats itself, we might see a slow recovery with potential policy interventions to stimulate market activity.

5. Easing Competition

  • Fact: Homes are lingering longer on the market (22 days in June 2024 vs. 20 days in June 2023), and fewer homes are selling above listing price (29% in June 2024 vs. 33% in June 2023).

  • Prediction: As competition eases, buyers will have more opportunities and negotiating power, potentially stabilizing prices. Expect to see more expired listings—an opportunity for motivated agents!

6. New Home Sales Stagnation

  • Fact: New home sales dipped 1% month-over-month in June 2024 to 617,000 units. The median new home sales price rose 2% month-over-month to $417,300, remaining flat year-over-year.