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Introduction
In May 2024, the real estate market continues to evolve, presenting both challenges and opportunities for buyers and sellers. This article explores current national trends, interest rates, and regional insights from a full-time realtor who is deeply engaged in the market.
Inventory Supply
The inventory supply is a critical metric in understanding the health of the real estate market. As of May 2024, the market has approximately a 3.2-month supply of inventory. This figure indicates how long it would take for the current homes on the market to sell based on the existing buyer demand. To put this in perspective, the lowest inventory supply in the past five years was 1.6 months in January 2022. During the spring of 2021, amidst the COVID-19 pandemic, the supply hovered around 2.3 months.
Market Health
The current market is healthier compared to the intense sellers' market seen in recent years. While it remains a sellers' market, the competitiveness has lessened, making it more balanced than during the height of the pandemic when low inventory and high demand drove fierce competition and bidding wars.
Interest Rates
Interest rates have been a hot topic in the real estate world. As of now, the national average interest rate for a 30-year fixed loan is around 7.3%. This is a significant increase from the 2021 average of 2.96%. The higher interest rates have implications for both buyers and sellers.
Impact on Buyers
The surge in interest rates means higher monthly payments for buyers, which can be daunting. However, low interest rates in previous years made buying more affordable, leading to increased demand and rising prices due to limited inventory. Buyers are now closely watching interest rates, hoping for a decrease. Yet, waiting for lower rates can be risky due to the potential for increased competition and higher prices in the future.
Buyer Strategies
Buyers are advised against waiting for interest rates to drop. Many others are adopting the same strategy, which could lead to a surge in demand and higher costs when rates eventually fall. Instead, buyers should consider current opportunities and explore strategies to lower their interest rates without waiting.
Seller Pricing Strategy
For sellers, pricing a home correctly is crucial in the current market. Overpricing can lead to the property sitting on the market longer, which may deter potential buyers. Buyers still assume they will have to pay at or above the asking price, so an overpriced home might push away suitable buyers. Correct pricing can attract more interest and potentially lead to bidding wars, ultimately resulting in a higher sale price.
Market Perception
If a home sits on the market too long, buyers may perceive it as having issues. Therefore, sellers need to set realistic prices based on market conditions to ensure a quicker sale and maintain buyer interest.
Election Year Concerns: Market Uncertainty
2024 is an election year, which adds a layer of uncertainty to the real estate market. Fears about potential market fluctuations due to political changes are common. However, proactive planning can help mitigate these concerns.
Planning Ahead
Both buyers and sellers are encouraged to start planning early. Consulting with a real estate professional to discuss needs, goals, and timelines can help navigate any upcoming market changes. Early preparation ensures better handling of market dynamics, regardless of political outcomes.
Conclusion
The real estate market in May 2024 presents a mix of stability and challenges. While the market remains a sellers' market, it is less intense than in previous years. Interest rates are higher, impacting buyer affordability, but opportunities still exist for those who act strategically. Sellers must price their homes correctly to attract buyers and achieve favorable outcomes. Amidst the uncertainty of an election year, early planning and professional guidance are crucial for both buyers and sellers to navigate the market effectively.
Key Takeaways
The market has a 3.2-month supply of inventory, indicating a healthier balance compared to previous years.
Interest rates for a 30-year fixed loan average around 7.3%, down from 7.8% in November 2023, up from 2.96% in 2021.
Buyers should try to avoid waiting for lower interest rates, as this strategy could lead to higher competition and costs.
Correctly pricing homes is essential for sellers to attract buyers and avoid prolonged market times.
Overpricing homes can result in negative perceptions and longer time on the market.
Early planning and consulting with real estate professionals can help navigate market uncertainties, especially during an election year.
Sources
National Association of Realors. "Residential Real Estate Market Snapshot". Retrieved from NAR.realtor (www.nar.realtor).
Realtor.com. "2024 Housing Market Predictions and Forecast". Retrieved from Realtor.com (Realtor.com).
Forbes. "Mortgage Rate Forecasts for 2024 Signal a Comeback for Real Estate". Retrieved from Forbes (www.nar.realtor).
This article was authored by Hunter Letendre with the assistance of ChatGPT, an AI language model developed by OpenAI. The AI provided research and drafting support based on provided sources.
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