“I haven't been this excited about a new year since last year!” - Everybody

What’s in Store for 2024?

The new year is here, and we are all recovering from the barrage of indulgences that come along with the holiday season. As we reluctantly take the first steps to starting new habits and dreaming up big goals for the upcoming year, we all inevitably will have something to say about how to improve our financial situation. There are many ways to do this, but few as effective and reliable as real estate.

“Well, of course you would say that Ryan, you are a real estate agent!”, you might be saying to yourself right now. And yes, that’s true, but it still doesn’t change the fact that owning real estate is one of the most important factors to securing future wealth.

Now, the past few years have been a wild ride, followed by a cooling of activity in 2023, so you might be wondering why you would want to get out there and get your hands dirty in 2024. Well, preparation and education go a long way in this business, so let’s start off with a snapshot of where we could be going in the real estate market this year. So, whether you are a want-to-be investor, tired renter, dream home chaser or anything in between… read on.

Afterall, we don’t rise to the occasion but rather, we fall to the level of our preparation.

MORTGAGE RATES

After a year of historically spiking interest rates, we are finally seeing the Fed cool their jets and the rates have come back down significantly throughout December and the first week of January. They were above 8% in October and November but now have slipped under 7% in just a few short weeks, averaging around 6.6-6.75% nationally. Mortgage rates of course depend on several factors, including your personal situation, but it has improved overall and looks like that will continue throughout the year.

What does this mean? Well, the obvious answer is that it makes your monthly payments more affordable when you purchase a home and may give you a little more buying power than you had before. The not so obvious answer is this – it could be an indication that the housing market is getting warmed up again and competition could go back to levels similar to the good old bad days of 2020-2022. This has a lot to do with our next topic…

HOUSING INVENTORY AND VALUES

Inventory is still low. I mean really low. Despite the slow down caused by the mortgage rate hikes in 2023, the U.S. housing shortage is still very much a big deal. There is reason to be hopeful, since the rate of decline has slowed in many areas of Virginia, including Hampton Roads, which may indicate that we are around the bottom of the curve and could see a pivot. However, (yeah, I know, there is always a catch) this could be stifled by the falling mortgage rates. How can a good thing be a bad thing? Because better rates bring more buyers, which causes more sales and a dwindling of the inventory, which increases demand and prices... and so on.

Speaking of prices, despite the slowness of 2023, median home values are still up across the board. In fact, the national median home price has gone up 40% since 2019! So, if you were the person waiting for those home prices to drop, pop and lock – well, you could have your back up against the wall watching everyone else dance for another year. Or more. Just saying.

Now hold up, it’s not all bad. There is always opportunity for those who are looking for it. For those who are ready to go now, it could be an opportune time while we are in that in between period of the slow season and falling rates before everyone else jumps aboard. If you aren’t ready now, don’t worry, let’s work on getting you prepared and when the time is right, we will hit the ground running.

A WORD FOR THE YUTES… SORRY...YOUTHS

If you are an ‘older’ millennial like myself (that’s so gross when I say it out loud) then you are most likely looking to buy your first home or maybe even move on to your second. If that is the case, then I applaud you.

Historically, however, that’s not so good. The median age of the first-time home buyer is older than ever, topping out at 36 in 2022 and only dipping to 35 last year. Ten years ago, it was much closer to 30 years old. This rise in FTHB age probably has a ton of different factors in it, but there is no doubt that most people would want to buy there first home much sooner than 36 years old. Nothing warms my heart more than someone under 25 years old buying their first home or investment property (sorry Boomers and GenXers, I still love you too).

Over the years, I have had the privilege of helping several people in their early twenties buy their first home. The fact that they can invest so young gives them a huge head start on their financial future. So, with all the challenges of inflation, housing shortages, high rents and changing mortgage rate… how do you get there?

By focusing on your vision, eliminating unnecessary expenses and cultivating a positive mindset. In short, you got to have a crystal clear plan.

And by teaming up with a great real estate agent to make that plan!

That’s it for me this time. Let’s make this a great year and if you have a real estate plan you want to make a reality this year, let’s connect and make it happen.

I will see you out there!

-Ryan

Sources:

https://virginiarealtors.org/2023/12/04/2023-first-time-home-buyer-profile/

https://virginiarealtors.org/2023/12/21/virginia-home-sales-remain-sluggish-but-data-suggests-we-could-be-nearing-a-pivot/

https://www.bankrate.com/mortgages/mortgage-rates/#mortgage-industry-insights