As we step into 2024, a sense of optimism is in the air, and I'm not alone in this sentiment. Even Zillow's economists are feeling upbeat. Reflecting on the past year, when nearly half of real estate agents, including myself, experienced a quieter market, this newfound optimism isn't just welcome, it's necessary. Let's dive into the key economic drivers that are shaping the real estate landscape as we enter the new year:
- A Robust Job Market: Despite a few hiccups in January, the employment sector remains strong, injecting confidence into the market.
- Inflation Trends and Interest Rates: Inflation seems to be gradually aligning with the 2% target rate. The Federal Reserve's recent signals suggest that we might be at the peak of benchmark rates, with potential rate reductions on the horizon. This could lead to softer mortgage rates, encouraging more sellers to overcome their rate lock hesitation, and ultimately revitalizing the housing market.
- Rising Seller Intentions: Based on Zillow's December research, a noteworthy 21% of homeowners are considering selling within the next three years. That's a significant 15% increase from the previous year.
Here's an interesting representation of the primary reasons driving this trend:
Key Insight: With many buyers feeling the need for more space, listings that highlight spaciousness are likely to attract attention.
Tech Jobs and Migration Patterns: A fascinating shift is occurring in the real estate world. Based on a study of United Van Lines data by Zillow, we're seeing a migration trend where long-distance movers are opting for more affordable metro areas with less competitive housing markets. Zillow's Senior Economist, Orphe Divounguy, points out that affordability is a major factor driving these migration trends. The once concentrated tech employment in cities like San Francisco and New York is now branching out to cities like Dallas, Austin, Denver, and others. This trend, catalyzed by the pandemic and remote work culture, presents a unique opportunity for real estate in these “rising star” metros.
Key Insight: The influx of workers in these affordable metros, many from tech backgrounds, means a growing market for upper-tier properties.
Renting vs. Buying: While rent growth is decelerating in many major metros, with some even experiencing a drop, national rents have still increased by 3.3% year-over-year. Interestingly, rental concessions have seen a notable surge. In December, over 30% of rentals listed on Zillow offered concessions, a significant jump from the previous year. This trend is particularly evident in cities like Oklahoma City and Memphis.
Here's the Deal: Potential buyers might consider another rental lease before purchasing. However, buying a home starts the journey of building equity, and with the likelihood of significant rate drops being low, now might be the ideal time to invest in a home.
As we navigate 2024's real estate market, these insights and trends provide a roadmap for understanding where the opportunities lie. Whether you're a buyer, seller, or fellow agent, staying informed and adaptable is key to making the most of this year's market dynamics. Let's embark on this journey together, and here's to a successful and prosperous year in real estate!
I hope you have found this blog post super helpful. If there is anything else we can do for you, including helping you sell (or buy) a home, I would be honored to assist. I hope you have a great day/evening. Cheers, E + J.
We are so happy you found our little corner of the interwebs. We look forward to y'all reaching out to us. We love to answer questions and welcome them. Recently we created some local maps, and you can download those by clicking the image/link above. Below, you will find an index of some very helpful information to assist you in learning more about the Houston suburbs. If you are relocating to our neck of the woods, we hope you reach out to us, because we would love to help you by being your local realtor and friend. Thoughtfully written for you. Hugs, Jo.
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