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Navigating Raleigh’s Real Estate Landscape in 2024: Challenges and Opportunities

The Real Estate Outlook for 2024

As we approach 2024, the national real estate market stands at a critical juncture, presenting challenges and opportunities for both home sellers and buyers. Understanding the evolving dynamics is essential for making informed decisions. In this blog post, we delve into the key insights from national real estate forecasts, shedding light on what buyers and sellers can anticipate in the coming year.

Current Market Overview and Snapshot

In 2023, the real estate market witnessed low inventory levels. This gave sellers a significant advantage. However, high mortgage rates and soaring home prices posed challenges for prospective buyers. Existing home sales declined. By September 2023, the median sale price for a home in the U.S. reached $394,300. Additionally, the average 30-year mortgage rate peaked at 8.01 percent, the highest in over two decades.

Entering the final quarter of 2023, the housing market is characterized by remarkably high home prices and mortgage rates. The median sale price of existing homes in the U.S. surged to $406,700 in July, just a few thousand dollars shy of the all-time high. Additionally, the average annual interest rate for a 30-year mortgage reached 7.36% in late August, indicating a challenging environment for buyers.

2024 Real Estate Outlook

  • Mortgage Rates: Experts predict that mortgage rates will remain high in 2024, hovering above 6 percent. While a significant drop could spur market activity, a sharp economic slowdown is required for substantial rate decreases.
  • Housing Sales: A slight increase in housing sales is anticipated if mortgage rates dip. However, the increase is not expected to be dramatic due to the persistently high rates. Plus, home owners cite other reasons besides rates that are keeping them from selling (see more below)
  • Housing Inventory: Housing supply remains low, with only a 3.4-month supply available nationally. While experts foresee some increase in inventory due to new constructions and existing homeowners willing to sell, a significant surge is unlikely.
  • Home Prices: Despite a recent slump in prices, home values are expected to rise in 2024. The lack of housing supply continues to exert upward pressure on prices. National forecasts predict a modest increase of around 2.6 to 6.5 percent in home prices.

Expert Predictions for 2024

  1. Home Prices: Chief Economist Lawrence Yun from the National Association of Realtors (NAR) anticipates a moderate increase in home prices, ranging from 3% to 4% in 2024. Similarly, experts at Zillow project a 3.4% uptick in home values. However, there is a disparity in opinions, as Moody’s Analytics and Morgan Stanley foresee a slight decline in U.S. home prices, indicating the ongoing uncertainty in the market.
  2. Housing Supply: Chen Zhao, leading the economics team at Redfin, predicts that the supply of houses will remain below what is considered a balanced market. This shortage in housing inventory is expected to persist, affecting both buyers and sellers.

Fannie Mae Survey Insights

A recent survey by Fannie Mae revealed that 29% of homeowners are staying in their homes longer than initially planned, citing various reasons beyond high mortgage rates. Factors such as liking their current house, proximity to family and friends, and high home prices contribute to this trend. This phenomenon challenges the conventional belief that rising mortgage rates alone are keeping buyers away, indicating a more nuanced perspective on the market dynamics.

Additionally, the low supply of housing has prevented buyers from gaining significant leverage. With only 1.1 million homes for sale in September, less than half the pre-pandemic average, buyers are competing over a dwindling number of listings. Homeowners are becoming increasingly reluctant to sell, further exacerbating the shortage and driving prices higher.

Conclusion: Informed Decision-Making in 2024

As the real estate landscape evolves in 2024, both sellers and buyers must navigate these challenges with vigilance and strategic planning. Understanding the market dynamics, considering local trends, and seeking guidance from real estate professionals are essential steps in making well-informed decisions. Despite the hurdles, opportunities exist for those who approach the market with knowledge and expertise, ensuring a successful and fulfilling real estate experience in the coming year.

In the Triangle area, we expect high demand and low inventory to continue to be the driving forces in the Raleigh area real estate market in 2024.

Home sellers who hire an experienced local agent and properly prepare and price their homes should have no problem selling in a reasonable amount of time for a good price. Keep in mind that real estate is local and market conditions can vary by neighborhood and price point.

Triangle area home buyers may want to consider the eastern part of the area since home prices are generally more reasonable. Home buyers will also want to utilize strategies that can help them get a better deal such as buying during the fall or winter and taking advantage of home builder incentives on new construction.

If you’re buying or selling a home in the Triangle or Eastern NC in 2024, reach out to us at 919-887-5114. We’ll help you confidently navigate changing market conditions and reach your real estate goals.

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