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A Lesson on the Current Real Estate Market: Understanding the Unusual Dynamics
On November 15, 2023, NAR Chief Economist Lawrence Yun dived into the state of the residential sector, sharing insights at the Residential Economic Issues & Trends Forum during the NAR NXT© National Association of REALTORS® event in Anaheim, Calif.
Real estate professionals can’t rely solely on past market behavior for predictions. This realization fueled a Residential Economic Issues and Trends Forum, blending Lawrence Yun’s observations and forecast with a broker panel titled “Nothing’s Normal.”
Forecast: A 2024 Uptick
After significant national sales declines in 2022 (17%) and a predicted 18% dip in 2023, Yun expects a moderate market upswing in 2024. He envisions rates dropping below 7% for borrowers by the spring homebuying season.
During its November meeting, the Federal Reserve made a notable shift, keeping the federal funds rate steady—a shift from the consistent increases since 2021. Despite challenging market conditions faced by real estate professionals in the past two years, Yun notes many homeowners stay optimistic due to inventory scarcity, pushing home prices upward.
The recent Federal Reserve survey on consumer finance underscores this, revealing a 34% increase in the median net worth of homeowners since 2019—now at $396,200 compared to $295,500 in 2019.
Yun highlights the cyclic nature of home prices, recognizing there will be stagnant or declining years. However, as a long-term homeowner, the assurance is likely to come out ahead in America.
Andi’s Insights on Whatcom County
Competition is fierce for listings that are spotless and move-in ready. Investing in repairs before listing is often worth it. With higher interest rates than last year, the buyer pool has shrunk, giving buyers power to seek concessions like closing costs or an interest-rate buydown. Proper pricing is crucial—even being 2-3% off can mean your house sits on the market for months.
Demand still outpaces supply. In today’s market, negotiating with multiple buyers requires a more strategic approach. The traditional practice of setting a deadline for the ‘highest and best offer’ is evolving.
Amidst these changes, real estate litigation adds pressure to unprepared agents. I encourage an open dialogue and welcome any questions for an insider’s view on cases.
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