This year has been an interesting one for real estate. After a boom in buying during the COVID-19 pandemic, things slowed down as home prices remained high amid soaring mortgage rates.
Buy/sell, rent/lease residential &
commercials real estate properties.
So what will 2024 hold? GOBankingRates spoke with two real estate experts to get their predictions for the upcoming year.
David Harris, Licensed Real Estate Salesperson at Coldwell Banker Warburg
David Harris, who started his real estate career in Connecticut, now specializes in apartments that offer water views and private outdoor space in Manhattan and Brooklyn, New York. Here are his predictions for 2024.
Buyers Who Left the Market Will Re-Enter
Prospective buyers may have exited the market in 2023 due to the high interest rates. Harris said we are due for a reversal.
“There is a lot of pent-up demand, and I think we are going to see some buyers coming back into the market in 2024,” he said. “I recently spoke with an attorney who reminded me how emotional the whole home-buying process can be. At the end of the day, this is what encourages people to move forward with a purchase when interest rates are at 8%: The individuals who have an emotional connection to a property will make the decision, along with a plan to move forward with a purchase, and refinance if rates drop.”
Interest Rates Will Fall
Harris believes interest rates could fall at some point in 2024.
“I don’t know when interest rates will fall, but they will eventually,” he said. “The buyers that find emotional attachment, and the sellers that are willing to heed what the market is saying, will drive the housing market until rates fall.”
It Will Be a Good Market for Foreign Buyers
Those who can afford to buy homes without taking out a mortgage will find good deals in 2024.
“With interest rates where they are, there is an opportunity for cash buyers, and in my personal experience, the foreign buyers I work with have been all cash purchasers,” Harris said. “So there is opportunity here and now for foreign buyers.”
Inventory Will Pick Back Up
2023 was an atypical year in terms of inventory ebbs and flows.
“This year, there was no big influx during the spring and fall seasons like we usually see in real estate,” Harris said. “We are not seeing inventory at the levels we are accustomed to, but going forward in 2024, I believe we’ll see more inventory as people settle into this elevated interest rate environment.”
The Luxury Market Will Continue To Thrive
Even though mortgage rates are high, Harris believes the luxury real estate market will be strong in 2024.
“If rates remain high and there are buyers that have a lot of cash, they will spend it,” he said. “They are not tied to interest rates, so as long as the inventory is there and prices are where they are, the luxury market will continue to do well.”
John Walkup, Co-Founder of UrbanDigs
John Walkup is a fintech expert and the co-founder of UrbanDigs, a real estate data analytics company. Here’s what he believes will happen to the real estate market in 2024.
Prices Will Drop — But They Will Go Up Again
Walkup predicts that real estate prices will dip in 2024 — but this dip will likely be short-lived.
“Right now, the market is treading water,” he said. “The buy-side and sell-side are both somewhat locked up, resulting in a lower liquidity environment. This environment will likely put some downward pressure on prices in the near term.
“However, as the current economic/mortgage rate environment normalizes, we could see more participants enter the market. Assuming that equation is somewhat balanced, prices may tick up.”
Fixer-Uppers Will Become More Attractive to Buyers
In 2023, turnkey properties ruled the market. Walker believes we will see a reversal in 2024.
“I do think we may see a return to action for unrenovated properties, which have been largely punished this cycle,” he said. “The discounts may prove attractive in 2024 compared to turnkey units.”
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This article originally appeared on GOBankingRates.com: Real Estate Experts Share Their Predictions for the 2024 Housing Market: Will Prices Finally Drop?