Last year’s market was defined by the “highs”. A twenty-year high in mortgage rates, record-high home prices, and continued high buyer demand. All of these factors, along with continued low inventory, made finding opportunities in the market challenging and the dream of American homeownership hard, especially for first-time buyers.
Will we see more of the same this year? Let’s take a look to see what 2024 has on tap…
We need interest rates to cool to 4% or 5%, but not cool too quickly. A quick drop in rates would eat away at our already very diminished inventory. The rates could be lower based on the 10-year Treasury yield hovering around 4%, but they are much higher. Many experts feel we have reached the peak of interest rates, and they will cool, but the question remains – when?
We have already seen some prices cool in softer markets across the U.S., but that isn’t on the horizon for Charlotte thanks, in part, to the healthy influx of people moving here. In-town home prices will most likely rise again around 4% to 5% this spring. Outside of 2020 & 2021, this has been Charlotte’s normal rate of price growth for about a decade. At this point, we simply don’t have enough housing supply to meet the demand or to create any concerns about falling prices.
Inventory continues to remain low, and even decrease, in Charlotte metro. Every year, I think that the inventory can’t possibly go lower than the year before, but here we are. Experts forecast more inventory this year, and we need sellers who have been on the fence for the last year or two to list. I strongly believe there will be some pent-up sellers this spring who are tired of putting things on hold and are not willing to wait any longer. If this fresh inventory hits alongside lower interest rates, we will see a little flourish of market activity. Fingers crossed!
Chief Economist at the National Association of Realtors (NAR) Lawrence Yun predicts existing home sales to rise by 13.5% this year. We shall see. Charlotte may be a bit of an outlier as one of the fastest-growing cities in the nation. I have a hard time thinking we can find all the inventory needed to meet those growth numbers. Regardless, it is positive news for the country.
If you have read my market updates in the past, you know that builders have been under-building for almost a decade. The lack of new home starts has been a huge part of our local inventory crunch. Luckily, there has been some positive development on that front recently! Builder starts are on the rise and were up 5% overall last year. This new construction projected growth is poised to continue in 2024. Builders are feeling strong about the future and the construction woes of COVID seem to have settled. Single-family home permits are also up for the tenth consecutive month according to the U.S. Department of Housing and Urban Development. What we need to watch is how many of those single-family home remodels result in a new listing.
There is no argument that 2020 and 2021 markets were white hot, while 2022 was milder and 2023 even cooler in comparison. My team and I have seen it across all aspects of our business. While 2024 is predicted to be better than 2023, it likely won’t feel “right” just yet. While I love all the positive predictions, I have lived through 20 years of the real estate market and know from experience that we have some key variables to contend with in 2024. Most notably, election years tend to elicit a temporary market pause the closer we get to November. Collectively, people sense a potential wave of change with any presidential election and want to see where the cards fall before making major life changes.
My team and I are excited to see what the new year has in store! The early spring market always gives us a good glimpse of what’s to come. In 2024, we are feeling positive and encouraged by all the forecasts we are seeing for the next six months. In the ever-changing and fast-paced Charlotte market, we keep our fingers on the pulse so you don’t have to. We know how to navigate any market condition and can help you best meet your real estate needs from buying or selling to investing or renovating.
We would love to help you make 2024 your best year yet. Give us a shout.
Cover Photo: Alexander South NC