For me, January is always the month that feels like a hangover from the close of the year past, celebrating the New Year combined with planning for the Atlanta spring real estate market, which has started in February for the past 4 or 5 years! So, this month, I’m removing my holiday decorations, organizing my office for the new year, and gearing up for the spring market by reviewing economic forecasting.
Current economic forecasts reflect that we are not artificially raising prices. Homes that are available to sell (home inventory) should grow. This will create more opportunities to find a house and decrease the need to overbid to "win" the home. Everything else in the market should also remain stable. It is hard to get better news! In my world, that translates to a good year for clients to transition to bigger or smaller homes, allow a lease to expire in favor of buying a new home, and allow investors to look at markets again. It is nice to be in a climate that doesn't favor the seller over the buyer or vice versa to the degree that it alienates the other. It means you can decide what's best for you without being forced to move ahead or delay until conditions improve. That says a lot and makes it an exciting time for real estate.
The National Association of REALTORS® Chief Economist, Lawrence Yun, forecasts that all of the data is very encouraging and that 4.71 million existing homes will be sold, the housing market is expected to grow, and Austin, TX will be the top real estate market to watch in 2024 and beyond. Yun predicts home sales will begin to rise next year – by 13.5% compared to 2023, and the median home price will reach $389,500 – an increase of 0.9% from this year. Metro markets in southern states will likely outperform others due to faster job increases.
Yun expects rent prices to calm down further in 2024, which will hold down the consumer price index. He predicts foreclosure rates will stay at historically low levels in 2024, comprising less than 1% of all mortgages. U.S. GDP will grow by 1.5%, avoiding a recession, with net new job additions slowing to 1.7 million in 2024, compared to 2.7 million in 2023 and 4.8 million in 2022. After eclipsing 8% in late 2023, he expects the 30-year fixed mortgage rate to average 6.3% and that the Fed will cut rates four times – calming inflationary conditions – in response to slower economic activity. "In addition, housing inventory is expected to rise by around 30% as more sellers begin to list after delaying selling over the past two years."
With all this excitement and new information coming at us, let's take January to regroup and recover from the overload. Now is the time to ask questions and review your goals and timelines. Just like the past several years, 2024 is going to be a fun ride. But my team and I are here to take it with you.
