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In our latest real estate market update, we're taking a comprehensive look at what lies ahead for the national housing market in the latter half of 2024. As the saying goes, "Most agents know what's happening. Good agents understand what's happening. Great agents can explain what's happening." My goal today is to be your guide in explaining the market's dynamics.
Key Question: What's Next for the National Real Estate Market?
One critical aspect we need to address is inventory. In many markets across the nation, particularly in New Hampshire, Maine, and Massachusetts, inventory is on the rise, especially at higher price points. Over the past few years, many sellers have held off, waiting for interest rates to drop. Now, realizing that this is unlikely, they are moving forward with their sales regardless of the current rates.
To illustrate, let's look at some data from New Hampshire:
For homes priced between $300,000 and $600,000, the average days on the market is 33, with a median of 11 days.
For homes priced between $600,000 and $900,000, the average days on the market increases to 43, with a median of 18 days.
Understanding Inventory and Days on Market
Days on Market (DOM) is a crucial indicator of market health and competition. At the lower price points, there's still considerable competition. Although not as intense as in 2020 and 2021, it's a healthy level. For buyers and sellers in this range, it's important to be prepared for a competitive environment.
In contrast, the higher price range shows a significant slowdown. Homes are staying on the market longer, and multiple offer situations are less common unless the property is exceptional. Sellers in this bracket should focus on excellent marketing and readiness, while buyers might find this an opportune time to purchase.
Price Predictions and Market Stability
According to forecasts from sources like Fannie Mae and Zillow, residential home appreciation is expected to average around 2.9% this year. This is a more conservative outlook compared to recent years, but it indicates that prices are stabilizing rather than crashing. Despite earlier fears of a housing market bubble burst, we are seeing a shift towards a healthier, more neutral market.
The increase in inventory and sustained high mortgage rates are contributing to this stabilization. However, there's still a significant gap in supply that needs to be filled, which is supporting the market.
Drivers of the Housing Market in 2024
The housing market, like the broader economy, is driven by supply and demand. As of mid-July 2024, the national average interest rate on a 30-year loan is around 6.5%. Should rates drop, especially below 5%, demand for mortgages will surge. However, a careful balance is needed. A rapid drop in rates could flood the market with buyers, putting upward pressure on prices once again.
Election Year Dynamics and Interest Rates
Historically, interest rates tend to decrease during election years. Many financial institutions predict that the Federal Reserve may cut rates soon, though this has been anticipated for some time without materializing. Realistically, we might not see interest rates in the 5% range until 2025. While waiting can be challenging, this period allows the market to stabilize, leading to better options and a less competitive environment.
A Cautiously Optimistic Outlook
Looking ahead, I am cautiously optimistic about the next five years. We can expect fluctuations, with periods of highs and lows, but overall, the market should remain healthy. Prices will likely continue to rise, albeit more slowly, and inventory will expand, offering buyers more options. Remember, real estate is profoundly local; national trends can vary significantly at the local level.
Conclusion
In conclusion, staying informed and prepared is key. Whether you're planning to buy or sell in New Hampshire, Maine, Massachusetts, or anywhere else, it's essential to have a strategy. Feel free to reach out if you need guidance or have any topics you'd like me to cover in future updates.
Thank you for watching and stay tuned for next month's update.
Watch the full video below for more details and additional charts.
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