The real estate market is often likened to a turbulent sea, with prices and trends rising and falling like waves. To help you make sense of the 2024 housing market, let’s take a deep dive into the factors shaping its trajectory, with a particular focus on housing prices and historical data.
It’s natural to be curious about whether housing prices are on the rise or taking a dip. The truth is, housing values tend to appreciate over time. It’s important to consider the broader context, especially when we look at interest rates. While current rates might seem “high,” they’re quite normal when we examine the last half-century.
Now, let’s talk about the peculiar nature of today’s real estate landscape. Supply and demand are the engines that drive the market, and recently, supply has been a hot topic. For nearly two decades, we’ve grappled with a housing shortage. Builders faced challenges during the Great Recession and, more recently, the disruptions caused by COVID-19.
However, land costs have surged, making it difficult for builders to maintain healthy profit margins. This brings us to the present, where we find ourselves in one of the most unusual real estate markets we’ve ever witnessed.
Inventory was expected to rise, but it simply hasn’t. And why is that? Well, here’s an intriguing statistic: 82% of homeowners with mortgages have interest rates below 5%, while 62% enjoy rates below 4%. With such favorable rates, many homeowners aren’t incentivized to move, even for a larger home.
So, what does this mean for the future? While interest rates are likely to stabilize (perhaps even slightly decrease), people will always have reasons to buy and sell homes—life circumstances like death, divorce, financial changes, and job relocations. Additionally, with rents on the rise, owning a home remains a strong hedge against inflation.
In conclusion, the 2024 real estate market is unique, with its own set of dynamics and challenges. While prices may not soar to the heights we’ve recently witnessed, real estate remains a sound long-term investment. As the saying goes, “Don’t wait to buy real estate. Buy real estate and wait.”
Looking to buy or sell a home in San Luis Obispo County? Contact Lindsey Harn Group at 805.441.7744 to discuss your next move.