January 24, 2024
Will the market change in 2024?
As we embark on the exciting journey of 2024, the Valley’s real estate landscape beckons with a myriad of possibilities. Let’s decipher the clues, predict the trends, and plan your real estate journey.
Closing the curtains on 2023, the Phoenix housing market experienced a slight dip, with existing home sales down by 7.2% and newly built homes witnessing a 3.92% decline in November 2023[5]. However, a glimmer of optimism emerged in mid-December as mortgage rates dropped below 7%, a positive sign propelling us into 2024.
What to Expect in 2024
As we stride into 2024, Tina Tamboer, senior housing analyst for The Cromford Report, suggests that Metro Phoenix is entering a weak seller’s market again [5]. While mortgage rates might reflect a pre-pandemic normality, albeit at higher rates[1], there’s a consensus that housing conditions will improve, unlocking inventory, moderating home-price appreciation, and facilitating transactions [2].
Median sales prices in the largest metros around the country are predicted to rise by an average of 1.2%, offering a favorable outlook for Phoenix which is ranked at 55th [3]. Chief economist Selma Hepp believes the region’s strong demand for housing will fuel a full recovery in 2024, posting new record highs in the coming year” [2].
Rate Outlook: Decreasing
The housing crystal ball reveals a decreasing rate outlook. While some foresee a slight increase in early 2024, the prevailing sentiment is a gradual decrease throughout the year. Predictions range from Redfin Corp. and the National Association of Realtors, anticipating rates to fall to 6.6% and 6.3%, respectively, to Realtor.com envisioning a close at 6.5%, with an average of 6.8% throughout the year [2].
Navigating the Market
For those contemplating a real estate venture, waiting on the sidelines for rates might not be the best strategy. The market is expected to get busier as rates decrease, leading to more competition, increased showings, and shorter times on the market[5].
The real estate adventure’s twists and turns depend on economic factors like Federal Reserve policies, interest rates, unemployment, and inflation. Phoenix Realtors immediate past president Butch Leiber predicts a “feeding frenzy” to kick off the year with interest rates already dropping about 1% since October [6].
Staying Informed with Someone You Can Trust
While the future remains unwritten, staying informed can make all the difference in your real estate adventure. Working with an experienced, knowledgeable REALTOR® who can advise you on the market will be key. Whether you’re a buyer, seller, or an adventurer exploring possibilities, we’re here to guide you every step of the way.
Have questions about the market? Embark on your 2024 real estate adventure with us by your side!
SOURCES:
- PRNewswire, “Realtor.com® Forecasts the 2024 Top Housing Markets,” 12/4/2023.
- Phoenix Business Journal, “Phoenix housing market likely to fully recover in 2024, one expert predicts,” 12/27/2023.
- Phoenix Business Journal, “Mortgage rates, housing inventory expected to see slight improvement in 2024,” 12/13/2023.
- AZ Big Media, “5 predictions for the Phoenix residential real estate market in 2024,” 1/20/2024.
- Phoenix Business Journal, “How housing prices are expected to change in metro Phoenix in 2024,” 1/17/2024.
- AXOS, “What 2024 holds for metro Phoenix real estate,” 1/2/2024.