- The Blueprint
- Our predictions for 2024
Our predictions for 2024
Plus, top 10 biggest sales of 2023
What a wild year in real estate
Well, this is it. We’ve come to our final newsletter for 2023. This has truly been a wonderful, exciting, and certainly wild year in the world of real estate.
To mark this occasion, we are going to deviate from our usual format and give you our final predictions for 2024, and also look back at the top sales of this past year.
Since we won’t be seeing you until after the ball drops, we wish you happy holidays and all the best to you and your families!
- James and David
The top 10 predictions for 2024
Still no housing bubble in 2024 - We know some people out there truly believe there’s a housing bubble, well, we are going to burst their bubble. We absolutely don’t believe it and find even the suggestion ridiculous and utterly implausible. Yes, we could likely see continued price growth and higher than pandemic-era mortgage rates, but that’s all we’re going to see
Mortgage rates will drop, but not quickly – Several experts predict that mortgage rates will drop to around 6% by the end of the year. We think that’s entirely reasonable. Some people fear mortgage rates are going to rise above 8%, but with the Fed planning to make at least three cuts next year, we think those fears are unwarranted. If you ask us, the question isn’t whether mortgage rates will fall but how fast they will drop.
Listing activity will rise modestly – We believe the effects of the rate-locked phenomenon will linger into 2024. Right now about 80% of mortgaged homeowners in the U.S. have rates at or below 5%, so you can understand why they’re not looking to budge. However, although they may not be inclined to sell at the moment when rates fall to within 1.5% of their current rate, some will be motivated to move.
Home prices will rise, but not much – Many experts think that home prices will grow by 1% next year, and we think that forecast makes a lot of sense. The bottom line: at worst, home prices are going to remain at current levels or grow by 1%.
Home values in markets that crashed will recover – Frankly, this one is tough to predict. Real estate tends to be cyclical, so they will likely recover, but we can’t say this for certain. We are still in the wake of the complete and utterly unusual activity we saw during the pandemic, so it’s tough to make any concrete predictions right now. Needless to say, we’ll be watching these markets carefully to see if the prediction pans out.
New construction will gain market share – Unlike the previous prediction, we think this one is a lock. Homebuilders will increase their market share as they continue to offer concessions such as below-market mortgages and rate buy-downs. There’s a reason why Warren Buffett invested $814 million into the homebuilding sector. Just as they did in 2023, buyers will get the best deals if they buy newly constructed homes.
Housing affordability will remain the same – Some experts claim housing affordability will get worse, but we don’t see it that way. Since home prices are going to either remain the same or grow only by around 1%, and mortgage rates are going to drop, we think housing affordability will remain about the same next year.
The U.S. Government will need to continue taking housing seriously – We believe this will continue to be a key issue. If cities and counties really care about housing affordability, they will need to ease their restrictive land use policies and streamline the permitting process, as well as reduce the fees that are charged to builders. These costs are passed directly onto homebuyers who already have enough on their plates.
Foreclosure activity won’t impact the market – This is the clearest sign that we’re not in 2008. Although foreclosure starts have picked up, they still remain well below pre-pandemic levels. Delinquency levels will rise in 2024, but they will only be returning to the long-term average and are not a cause for concern.
Sales will rise, but still remain low – We believe that sellers will have the upper hand in 2024, as demand for homes will outpace supply. But we expect the number of home sales to increase marginally next year, say, by 0.1% to 4.07 million
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Recently, the company stunned nearly everyone by becoming the #2 most-visited site behind Zillow. But that, naturally, didn’t sit well with its competitors, especially Realtor.com Senior VP Bob Evans, who claimed Homes.com doesn’t help agents.
In response, Homes.com CEO Andy Florence wrote a terrific and important letter in defense of his company. We think this letter is a must-read for all agents, and we encourage everyone to watch the accompanying video which breaks it all down.
The top 10 priciest deals of 2023
Southhampton, New York
2023 was a tough year in the world of ultra-luxury real estate. Only 29 properties sold for at least $50 million, according to Jonathan Miller, President and CEO of appraiser Miller Samuel. That’s down more than 35% from last year when 45 properties in that tier closed, and it’s down more than 44% from 2021, when 52 properties broke the $50 million barrier, making it the best year for ultra-luxury real estate on record. Bloomberg covered the details of these top sales and the proud new owners of the nation’s most expensive properties.
Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Mortgage News Daily
We’ll be back in your inbox on Tuesday, January 9, 2024, with the top stories, industry insights, and career-making tips you need to be at the top of your game.
Before we head out for the year, we just want to say thank you for helping us build this community from the ground up. It’s been an exciting journey so far and we can’t wait to see what next year will bring. We look forward to seeing you all in 2024!!!
- James and David