January Market Update & Newsletter

 

Another Year in the Books

Reflecting on 2024 and Looking Ahead to 2025

Another year has come and gone, and what a year it was! It was a whirlwind for the real estate industry. But if you’ve been reading my blogs and newsletters, at least it hasn’t been a surprise! The most significant changes came with updates to our industry practices, particularly regarding commissions.

One major shift was that commissions are no longer allowed to be published in MLS systems or websites connected to them. Additionally, buyers and agents are now required to sign an Exclusive Right to Represent Buyer Agreement before viewing homes. While this has been the law in Virginia since 2012, it’s now more crucial than ever to determine how an agent’s commission will be paid in conjunction with representing you if it isn’t negotiated within the contract. On the bright side, these changes have brought greater transparency to how real estate professionals are compensated.

What didn’t change in 2024? Despite widespread predictions, interest rates did not fall as expected. Many anticipated rates would dip into the mid-5% range, but they stayed elevated throughout the year, even reaching the mid-7% range. This kept many homeowners from selling, resulting in continued low inventory instead of the expected rise in homes available for sale.

As a result, sales remained flat compared to 2023 and may even show a slight decrease when the final numbers come in. Similarly, while some forecasted a drop—or even a “crash”—in home prices, the opposite occurred. Prices increased, which added to the wealth of homeowners. However, rising prices and rates made affordability a significant challenge, especially for first-time buyers. Another area where expectations fell short was regarding Federal Reserve rate cuts. While many predicted six cuts in 2024, there were only three. I felt six was ambitious, especially given that I didn’t believe that the inflation genie would go completely back in the bottle, so I predicted three, which turned out to be correct.

What’s Ahead in 2025? Here are my predictions for the coming year:

  • Mortgage rates will increase in volatility as the Trump administration takes big swings on the economy, how government functions, and regulations. But I expect the rate volatility to be contained within the range we saw last year, though perhaps just a tick lower.
  • Inventory levels will remain low but improve slightly. The reality will set in that the current interest rate environment is the new normal, and homeowners who didn’t sell because they were “rate locked” in their current mortgages will remember why they wanted to sell and move in the first place. Additionally, during the change in administrations we will see more government turnover than we have historically, adding to inventory.
  • Home prices will continue to rise due to low inventory and strong demand. Affordability will remain a significant challenge, especially for first-time buyers.
  • Many predict that the Fed will cut rates 4 times or more. Take the “Under” on that one.
  • Fewer agents will remain in the business due to declining transactions and commission changes. This will be a good thing for everyone.
  • Homeowner’s insurance rates will rise due to the impact of natural disasters, making insurance harder to secure in some areas.
  • Inflation is THE KEY indicator that everyone should be looking at for it’s impact on the housing market. It drives FED action on rates (impacting supply and affordability) and on personal budgets (impacting demand). It should stay manageable, in the range of 2.5–3%, and perhaps lower by the 4th quarter as the Trump administration’s expected energy policies and deregulation drive down cost-push inflation pressures.
  • Now more than ever, having a Realtor represent you is critical to navigating the evolving real estate landscape.

As we step into 2025, it’s clear that the real estate market will continue to present its challenges, but with the right guidance, opportunities abound. Whether you’re looking to buy, sell, or simply understand how these changes affect you, I’m here to help. Together, we can navigate this ever-changing market with confidence.

Here’s to a prosperous and fulfilling 2025 – Happy New Year!

It’s a good life.

Chris

 

New Year, New Opportunities

How to Maximize your Homes Potential in 2025

As we step into 2025, it’s the perfect time to set goals — not just for yourself but for your home too. Whether you’re planning to stay put, sell, or buy a new property, taking intentional steps now can make a big difference in the year ahead. Here are five key things you can do to maximize your home’s potential this year:

  1. DECLUTTER AND ORGANIZE – The start of a new year is a great time to let go of items that no longer serve you. Decluttering not only makes your space more inviting but also gives you a clearer perspective on how to best use your home. Tackle one room at a time or commit to the popular “one-in, one-out” rule to prevent future clutter.
  2. UPGRADE FOR ENERGY EFFICIENCY – Winter is the ideal season to address energy efficiency in your home. Adding weather stripping to doors and windows, upgrading to a smart thermostat, or replacing older appliances with energy-efficient models can lower your utility bills and boost your home’s appeal. Thinking bigger? Solar panels or energy-efficient windows are great long-term investments that increase your home’s value and sustainability.
  3. PERFORM WINTER MAINTENANCE – Don’t let winter’s chill catch you off guard. Check your home’s insulation to keep heating costs down and inspect your HVAC system to ensure it’s running efficiently. Take the time to clear gutters and assess your roof for damage that could lead to costly repairs later.
  4. SET REAL ESTATE GOALS – Have you been thinking about buying your dream home or downsizing to a more manageable space? January is the perfect time to outline your real estate goals for the year. Whether it’s saving for a down payment, improving your credit score, or determining the best time to list your property, starting now will help you achieve those goals with ease. Partnering with a real estate expert (like myself) ensures you’re on the right track.
  5. LEVERAGE YOUR EQUITY – If you’ve owned your home for several years, you might be sitting on significant equity. Consider how you can use this to your advantage in 2025. Refinancing, investing in home improvements, or even purchasing a rental property are all options that could work for you. A conversation with a financial advisor can help you decide the best way to leverage your investment. I can connect you with a great advisor!

These simple steps can help you get the most out of your home this year. If you’re ready to take action or need guidance, let’s connect. Here’s to a successful 2025!

 

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