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3 strong signs in Zillow’s 2024 forecast
Plus, next year’s top home market
Rinku Mathew
December 05, 2023
Stay connected, build loyalty
This month is all about connecting and reconnecting—with our families, with ourselves, and of course, with our clients. But we always take this time not only to connect with our current clients, but our past clients as well.
In our business, it can be very easy to take the “one-and-done” approach. Once the deal is done, so is your relationship with the client. But there can be tremendous value in maintaining those relationships, and the holidays provide a perfect opportunity to do it.
Scroll down to today’s Foundation Plans, where we give you our tips on how to maintain the connection not just this month, but all year round.
But first, let us connect you to this edition of The Blueprint!
- James and David
Zillow’s predictions for 2024
Home buyers will have more options in 2024, and a bit more breathing room when it comes to affordability. That’s the topline takeaway from Zillow’s forecast for next year. Here are the company’s other major projections:
More homes will hit the market, as homeowners accept that mortgage rates aren’t falling any time soon
Home buying costs will level off, giving hopeful buyers a chance to catch up
The new starter home will be a single-family rental
Traditional home buyers will compete with home flippers for homes that need a little repair
Artificial intelligence will enhance the home search experience
Our take
Three good trends stand out to us from this forecast: 1) homebuying costs will level off 2) more homes will hit the market and 3) AI will enhance the home search process. From our vantage point, all of these are good signs, and quite likely to happen. The first two trends would definitely help struggling buyers. And whether it’s from AI or not, any modification that simplifies the homebuying process is always welcome.
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Excellent news on the fight against inflation
The latest month-over-month Personal Consumer Expenditures (PCE) and trimmed PCE data moved further towards the Federal Reserve’s inflation target. That’s according to Zillow’s most current report on inflation. Here are the key data points from October:
The PCE price index ticked up less than 0.1% month-over-month and dipped from annual growth of 3.4% in September down to 3%
Core PCE, the Fed’s preferred measure of inflation, which excludes food and energy prices, dropped from 3.7% on an annual basis in September to 3.5%
Our take
This truly is great news. We are going to have a “soft landing" this year. That is, inflation is decreasing while GDP is positive and unemployment is low. Moreover, with inflation continuing to move toward the Federal Reserve’s 2% target, it’s very possible that the Fed might actually CUT rates in 2024 to avert any economic slowdown. The only hitch: even if short-term bond yields fall, long-term yields are likely to remain elevated. Basically, don’t expect to see pandemic era mortgage rates anytime soon. Still, as inflation continues to fall, expect less volatility in mortgage rates. We truly want more of this, and faster!
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Top housing markets for 2024
Eight metros are predicted to break double-digit sales growth in 2024, according to Realtor.com. While these top metros are still going to have sales levels that are historically low, they’re projected to see sales grow by 13% on average.
Although affordability will propel sales and price growth in top markets in the Midwest and Northeast, home sales in expensive West Coast markets are projected to rise as well.
Here are Realtor.com’s top housing metros for 2024.
Toledo, OH
Oxnard, CA
Rochester, NY
San Diego, CA
Riverside, CA
Bakersfield, CA
Springfield, MA
Worcester, MA
Grand Rapids, MI
Los Angeles, CA
Our take
While we do see a lot of California metros on this list, it’s important to note that they’re all in SoCal. None of them are from the Bay Area or Northern California. This report also has good info for agents across the country. Study it carefully and look at the relevant markets near your neighborhood. See if these projections match up with what you’re seeing with actual local sales data. Use that to set the baseline for your expectations for 2024.
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Schematics
The news that just missed the cut
Chicago, IL
Miami and Mexico City real estate giants launch new mega fund for Sun Belt properties
How agents can incorporate “information-assisted selling” in their craft
The late great billionaire investor Charlie Munger’s advice on home buying
Nashville is booming and builders are scrambling to keep up
This city is luring L.A. and Austin buyers in droves
Foundation Plans
Advice from James and David to win the day
As we said up top, December is the month of connecting and reconnecting. The holidays give us a great chance to check in with clients. But you can also find other opportunities throughout the year. Today, we’d like to give you some concrete examples of how to check in with clients in an organic, authentic, and “non-salesy” way.
Home anniversaries – In addition to remembering your client’s birthday or other special days, contact them on their home anniversary if you helped either sell or purchase their home. Your clients will appreciate the thoughtfulness, and you’ll forever be the one who remembers what makes their home uniquely special.
Market updates – We believe you should be sending an update at least every quarter. That’s the bare minimum! Start with a quick MLS search to find everything that has sold in your client’s neighborhood in the last six months. Also, show them what’s currently on the market. Pair that info with a video like this—it’s a fantastic way to stay top of mind, and your clients will always be curious about their home values.
Give thoughtful gifts – Especially during the holidays, it’s an entirely appropriate and great way to stay in touch with past clients. Use services like Pop By Co. or Dare & Co. to simplify the process for you. All you need to do is send them a CSV or Excel file with your client’s names and addresses, and they will send out gifts on your behalf. Be genuine in your messages. Your clients will remember.
The 1% Blueprint
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For Blueprint subscribers, the course is 30% for a limited time. If you’d like to take our course to learn how to become the top 1% of your market click here!
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Mortgage News Daily
That’s a wrap on this edition of The Blueprint!
We hope you crush it this week! Message us. We love hearing from you. Tell us your success stories as well as what you’re struggling with and working through in this market. Ask us any questions you might have. We’re here to help and connect.
Thanks for reading, and we’ll see you back here on Friday!
- James and David
