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<\/a><\/p>\nWow, in the blink of an eye, 2023 is over.\u00a0 A lot happened during the blink, so it was certainly eventful, but time sure does fly.\u00a0 You may be asking what happened in real estate this year (though if you’ve been reading my blogs or these newsletters you already know the answers!).\u00a0 Let\u2019s start with interest rates because they have such a profound influence on not only affordability, and thus demand, but also supply.\u00a0\u00a0If you recall, they started the year at just over 6% and then steadily increased until October.\u00a0 This is when they hit their 20+ year high, topping out at about 8.25%.\u00a0 Since then, we have had eight straight weeks of declining rates resulting in a much lower rate of about 6.67% today.\u00a0 This is good news all around and is well below our 50-year average of 7.75%.\u00a0 Purchasers are taking advantage of these lower rates and sellers are re-thinking a move, especially move-ups.<\/p>\n
But, along with the steady rise in rates, we had a lot of volatility during this time\u00a0which, of course, impacted sales.\u00a0 At the beginning of the year, we were predicting\u00a0the total number of sales in the US to decline from just over 5 million to 4.6 million\u00a0sales. This is down from 6.1 million sales in\u00a02021…huge drops, right?\u00a0 Well, the\u00a0volatile interest rate environment created by the necessitated\u00a0Fed actions to raise rates to combat inflation\u00a0will\u00a0result in sales at just 4.1 million in 2023.<\/p>\n
This being said, we would have had more sales if we had more inventory.\u00a0 In Northern Virginia we started the year with 1,611 homes for sale, we reached a high of 2,044 in October and will finish with just 1,065 houses for sale.\u00a0 The reason for low inventory?\u00a0 Interest rates- plain and simple.\u00a0 People are married to their rate and payment.\u00a0 Eighty-two percent of people with a mortgage have a rate of less than 5%, so they don\u2019t want to give up their low rate for a higher rate\u2013at least right now.\u00a0\u00a0Additionally, prices continue to go up.\u00a0 At the beginning of 2023, I said prices would continue to increase at the rate of 3-5%.\u00a0 Well, they increased by 3.5% so this, too, has prevented some from putting their home on the market.\u00a0 Higher rates and higher prices equal less affordability, and people are staying put.\u00a0 I must say that for some people staying put and waiting things out is a mistake.\u00a0 I did some detailed math on one of my blogs in December I hope you will check out that demonstrates why for some that might be the case.<\/p>\n
Nationally, “experts” predicted prices would fall and inventory would increase…they\u00a0were wrong on both fronts.\u00a0 In the US, prices have gone up over 5%, and inventory,\u00a0as I mentioned, is very low.<\/p>\n
So a few of my predictions for 2024 are:<\/p>\n
\u2022Interest rates will continue to decline as inflation is (finally) rounding into check-and it is an\u00a0election year.\u00a0 I believe they will be in the low\u00a06\u2019s to high\u00a05\u2019s for much of the year.<\/p>\n
\u2022House prices will increase by 1-3% due to strong buyer demand and lower rates\u00a0which will put upward pressure on prices.\u00a0 I’m leaning more towards the 3% figure regionally.\u00a0 Just too much demand, which will only increase as rates moderate.<\/p>\n
\u2022We will see more houses sell.\u00a0 People will trade a 4-5% interest rate for a 5-6%\u00a0rate because they still have powerful non-financial\u00a0reasons to move, so more inventory with more demand equals more house sales.<\/p>\n
\u2022As wage growth and employment remain strong, I don\u2019t believe we will go into a\u00a0recession\u2013but if we do, it will be bad for the economy but great for real estate (based mostly on rate policies).<\/p>\n
Give me a call if I can help answer any questions\u2013and happy new year!<\/p>\n
It’s a good life.<\/p>\n
Chris<\/p>\n
BUYING A HOME IN 2024? HERE ARE 4 WAYS TO GET STARTED<\/h2>\n
Read the full article at news.remax.com<\/em><\/p>\n The current housing market continues to face adversity, but some real estate experts see promise in the year ahead. As RE\/MAX President and CEO Nick Bailey recently shared with Bloomberg, more competitive interest rates could be on the horizon. \u201cThat\u2019s going to mean good things for buyers \u2013 and better affordability,\u201d he says. For those embarking on their homebuying journey in 2024, here\u2019s where to get started.<\/p>\n 1. Get pre-approved for a mortgage<\/strong><\/p>\n For those purchasing a home with financing, it\u2019s important to meet with a\u00a0\u00a0\u00a0 mortgage lender as early on in the process as possible. After evaluating factors like credit score and income, the lender will determine what type of mortgage you qualify for. While many are familiar with the 30-year conventional loan, there are other options that may be up for consideration, like adjustable rate mortgages (ARM), VA loans, FHA loans, among others. What\u2019s especially helpful is getting pre-approved for a mortgage \u2013 this is how you determine your budget and establish a price range to shop in.<\/p>\n 2. Find a real estate agent<\/strong><\/p>\n A trustworthy real estate professional is the go-to expert on all facets of the homebuying process, from finding potential properties to coordinating inspections to negotiating on your behalf to recommending their preferred local service providers after you\u2019ve moved in. They\u2019re also oftentimes one step ahead when it comes to navigating specifications of the local\u00a0\u00a0\u00a0\u00a0\u00a0 market. \u201cWhile the results of the monthly RE\/MAX National Housing Report tell an overall story, the key for homebuyers and sellers is to work with a local real estate agent who can speak to the unique local conditions,\u201d Bailey says.<\/p>\n 3. Differentiate wants from needs<\/strong><\/p>\n Identifying wants and needs ahead of touring homes can help ensure you stay on track and consider options that best fit your crucial criteria. The best way to do this is to make a \u201cwants vs. needs\u201d list and prioritize features you can\u2019t live without. To start getting ideas, consider the good things and gripes about your current living situation.<\/p>\n 4. Start browsing for homes<\/strong><\/p>\n Ready to get ideas \u2013 or find favorite homes to tour with your real estate agent? Head online and start making a list to share with your real estate agent!<\/p>\n <\/p>\n<\/a><\/p>\nRecipe of the Month<\/h2>\n