The Latest 2024 Housing Market Forecast

The new year is right around the corner, and you might be wondering if 2024 will be the right time to buy or sell a home. There are certainly some really great deals to be had out there if you can cope with the higher interest rates for a while. The winter is a great time to buy! For Sellers, it comes down to clients' personal situation and we can implement any number of strategies... If you want to make the most informed decision possible, it’s important to know what the experts have to say about what's ahead for the housing market. Spoiler alert: the projections may be better than you think. Here’s why.

Experts Forecast Ongoing Home Price Appreciation

Take a look at the latest home price forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR):

As you can see in the orange bars on the left, on average, experts forecast prices will end this year up about 2.8% overall, and increase by another 1.5% by the end of 2024. That’s big news, considering so many people thought prices would crash this year. The truth is, prices didn’t come tumbling way down in 2023, and that’s because there just weren’t enough homes for sale compared to the number of people who wanted or needed to buy them, and that inventory crunch is still very real. This is the general rule of supply and demand, and it continues to put upward pressure on prices as we move into the new year.

Looking forward, experts project home prices will continue to rise next year, but not quite as much as they did this year. Even though the expected rise in 2024 isn't as big as in 2023, it's important to understand home price appreciation is cumulative. In simpler terms, this means if the experts are right, according to the national average, after your home's value goes up by 2.8% this year, it should go up by another 1.5% next year. That ongoing price growth is a big part of why owning a home can be a smart decision in the long run.

Projections Show Sales Should Increase Slightly Next Year

While 2023 hasn’t seen a lot of home sales relative to more normal years in the housing market, experts are forecasting a bit more activity next year. Here’s what those same three organizations project for the rest of this year, and in 2024 (see graph below):

While expectations are for just a slight uptick in total sales, improved activity next year is a good thing for the housing market, and for buyers and sellers like you. As people continue to move, that opens up options for hopeful buyers who are looking for a home.

So, what do these forecasts show? The housing market is expected to be more active in 2024. That may be in part because there will always be people who need to move. People will get new jobs, have children, get married or divorced – these and other major life changes lead people to move regardless of housing market conditions. That will remain true next year, and for years to come. And if mortgage rates come down, we’ll see even more activity in the housing market.

The Local Lowdown:

Prices Near Record Highs Across Most of the North Bay: In our local North Bay market, the scenario reflects the national trend. Home prices, particularly in Marin and Sonoma Counties, have remained resilient despite rising mortgage rates. In October, median prices hovered near record highs. Again, this is attributed to incredibly low inventory and continued demand. This is a beautiful place to live!

Sales Surge in October: The fall season brought a significant rise in sales, following a peak in single-family home inventory in September. Although inventory increased this year, it's still historically low, driven by factors like higher interest rates and seasonality. New listings in September surged by 10%, contributing to a 16% increase in sales in October. Despite a slight decline in sales and new listings year over year, the market experienced heightened demand, allowing sellers more negotiating power.

Months of Supply Inventory Indicates Seller's Market: While the market is slowly trending toward balance, the Months of Supply Inventory (MSI) remains below three months, indicating a continued preference for sellers. This trend holds except for single-family homes and condos in Napa, which are closer to a balanced market. As we enter the winter months, listings aren't selling as quickly, so despite less new listings hitting the market, the supply remains steady.

What does this mean for you? If you're considering buying or selling in Marin or Sonoma County, understanding these local trends is crucial. Despite a market that slightly favors sellers, the sustained demand and competitive environment suggest that now could still be an opportune time to make your move. Not everything is flying off the market, so properly prepping and pricing properties is crucial. If we can prep and stage the property, we will position ourselves for a better outcome. Now is a good time to start talking with an agent if you're considering as sale in 2024.

In Conclusion: As we step into 2024, both national and local real estate markets are poised for continued activity. Understanding these trends empowers you to make informed decisions, ensuring your real estate journey aligns with the dynamic landscape. Let's discuss the latest forecasts together and tailor a plan for your next move in Marin and Sonoma Counties.