Going into 2023, there was a lot of talk about a possible recession that would cause the housing market to crash. Some in the media were even forecasting home prices would drop by as much as 10-20%—and that might have made you feel a bit unsure about buying a home.

But here’s what actually happened: home prices went up more than usual. Brian D. Luke, Head of Commodities at S&P Dow Jones Indices, explains:

“Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years.”

To put last year’s growth into context, the graph below uses data from Freddie Mac on how home prices have changed each year going back to 1980. The dotted line shows the long-term average for appreciation:

The big takeaway? Home prices almost always go up.

As an article from Forbes says:

“. . . the U.S. real estate market has a long and reliable history of increasing in value over time.”

In fact, since 1980, the only time home prices dropped was during the housing market crash (shown in red in the graph above). Fortunately, the market today isn’t like it was in 2008. For starters, there aren’t enough available homes to meet buyer demand right now. On top of that, homeowners have a tremendous amount of equity, so they’re on much stronger footing than they were back then. That means there won’t be a wave of foreclosures that causes prices to fall.

The fact that home values went up every single year except those four in red is why owning a home can be one of the smartest moves you can make. When you’re a homeowner, you own something that typically becomes more valuable over time. And as your home’s value appreciates, your net worth grows.

So, if you’re financially stable and prepared for the costs and expenses of homeownership, buying a home might make a lot of sense for you.

Bottom Line

Home prices almost always go up over time. That makes buying a home a smart move, if you’re ready and able. Let’s connect to talk about your goals and what’s available in our area.

Some Highlights

• If you’re looking to buy a home, it’s important to know how mortgage rates impact what you can afford and how much you’ll pay each month.
• That’s because even a small change in mortgage rates can have a big impact on your purchasing power.
• The best way to navigate changing mortgage rates and make an informed buying decision is to rely on the expertise of a local real estate professional and mortgage lender.

If you’re looking to buy a home, the recent downward trend in mortgage rates is good news because it helps with affordability. But there’s another way this benefits you – it may inspire more homeowners to put their houses up for sale.

The Mortgage Rate Lock-In Effect

Over the past year, one factor that’s really limited the options for your move is how few homes were on the market. That’s because many homeowners chose to delay their plans to sell once mortgage rates went up. An article from Freddie Mac explains:

“The lack of housing supply was partly driven by the rate lock-in effect. . . . With higher rates, the incentive for existing homeowners to list their property and move to a new house has greatly diminished, leaving them rate locked.”

These homeowners decided to stay put and keep their current lower mortgage rate, rather than move and take on a higher one on their next home.

Early Signs Show Those Homeowners Are Ready To Move Again

According to the latest data from Realtor.com, there were more homeowners putting their houses up for sale, known in the industry as new listings, in December 2023 compared to December 2022 (see graph below):

Here’s why this is so significant. Typically, activity in the housing market cools down in the later months of the year as some sellers choose to delay their moves until January rolls around.

This is the first time since 2020 that we’ve seen an uptick in new listings this time of year. This could be a signal that the rate lock-in effect is easing a bit in response to lower rates.

What This Means for You

While there isn’t going to suddenly be an influx of options for your home search, it does mean more sellers may be deciding to list. According to a recent article from the Joint Center for Housing Studies (JCHS):

“A reduction in interest rates could alleviate the lock-in effect and help lift homeowner mobility. Indeed, interest rates have recently declined, falling by a full percentage point from October to November 2023 . . . Further decreases would reduce the barrier to moving and give homeowners looking to sell a newfound sense of urgency . . .”

And that means you may see more homes come onto the market to give you more fresh options to choose from.

Bottom Line

As mortgage rates come down, more sellers may re-enter the market – that gives you an opportunity to find the home you’re looking for. Let’s connect so you’ve got a local expert on your side who’ll help you stay on top of the latest listings in our area.

Expert Quotes on the 2024 Housing Market Forecast

If you’re thinking about buying or selling a home soon, you probably want to know what you can expect from the housing market in 2024. In 2023, higher mortgage rates, confusion over home price headlines, and a lack of homes for sale created some challenges for buyers and sellers looking to make a move. But what’s on the horizon for the new year?

The good news is, many experts are optimistic we’ve turned a corner and are headed in a positive direction.

Mortgage Rates Expected To Ease

Recently, mortgage rates have started to come back down. This has offered hope to buyers dealing with affordability challenges. Mark Fleming, Chief Economist at First American, explains how they may continue to drop:

“Mortgage rates have already retreated from recent peaks near 8 percent and may fall further . . .”

Jessica Lautz, Deputy Chief Economist at the National Association of Realtors (NAR), says:

“For home buyers who are taking on a mortgage to purchase a home and have been wary of the autumn rise in mortgage rates, the market is turning more favorable, and there should be optimism entering 2024 for a better market.”

The Supply of Homes for Sale May Grow

As rates ease, activity in the housing market should pick up because more buyers and sellers who had been holding off will jump back into action. If more sellers list, the supply of homes for sale will grow – a trend we’ve already started to see this year. Lisa Sturtevant, Chief Economist at Bright MLS, says:

“Supply will loosen up in 2024. Even homeowners who have been characterized as being ‘locked in’ to low rates will increasingly find that changing family and financial circumstances will lead to more moves and more new listings over the course of the year, particularly as rates move closer to 6.5%.”

Home Price Growth Should Moderate

And mortgage rates pulling back isn’t the only positive sign for affordability. Home price growth is expected to moderate too, as inventory improves but is still low overall. As the Home Price Expectation Survey (HPES) from Fannie Mae, a survey of over 100 economists, investment strategists, and housing market analysts, says:

“On average, the panel anticipates home price growth to clock in at 5.9% in 2023, to be followed by slower growth in 2024 and 2025 of 2.4 percent and 2.7 percent, respectively.” 

To wrap it up, experts project 2024 will be a better year for the housing market. So, if you’re thinking about making a move next year, know that early signs show we’re turning a corner. As Mike Simonsen, President and Founder of Altos Research, puts it:

“We’re going into 2024 with slight home-price gains, somewhat easing inventory constraints, slightly increasing transaction volume . . . All in all, things are looking up for the U.S. housing market in 2024.”

Bottom Line

Experts are optimistic about what 2024 holds for the housing market. If you’re looking to buy or sell a home in the new year, the best way to ensure you’re up to date on the latest forecasts is to partner with a trusted real estate agent. Let’s connect.

Well, well, well…here we are already in DECEMBER! I am truly boggled as to how the holidays and the end of 2023 is among us already.
Not only am I excited for holiday lights (see below for a list of to check out) parades, hot cider and of course SANTA (!) but I’m equally excited for what is happening this week in the mortgage market. Let’s dive right in and take a look at what’s going on!

Remember, every buyer and seller’s situation is different and personal. Is it the right time for you to buy or list your property? Give me a call and let’s assess together. I will provide you accurate and relevant data so you can make the most informed decision possible.

Holiday Cheers-
Kara Brem

Real Estate News and Market Trends

November numbers are in. Here’s the scoop:

The mortgage market just had its strongest week in months and I cannot begin to explain how happy this makes me for my buyers AND sellers.

Falling mortgage rates brought increased demand as well. Total home loan applications increased 2.8% for the week ending Dec. 1 compared to the previous week, according to data from the Mortgage Bankers Association (MBA).

Slower inflation, along with the confidence financial markets have that we are nearing the end of the Fed’s hiking cycle, has brought mortgage rates to the lowest level since early August.

Now all we can do is hope that we continue to move in this direction!

Other big news is the new loan limits for 2024. In San Diego County, the Conventional limit is up to $766,550 and the high loan limit is up to $1,006,250. Most lenders begin using these new limits right away.

NOTE: There are two slides. One is for detached homes in North county, SD and the other is for attached (condos and townhomes). If you would like specific cities or zip codes reach out to me for a more tailored synopsis.

Mortgage Rate Update:

The holiday season is delivering early gifts to would-be buyers. Having climbed relentlessly for most of 2023, from just below 6% to just over 8% in October/November, average 30 year mortgage rates have plummeted in recent weeks to mid 6’s. Woohoo! Furthermore, with inflation continuing to trend lower, the markets are increasingly convinced that the Fed it’s done hiking rates and could start CUTTING rates in the first half of 2024.

It’s beginning to look a lot like Christmas. 🙂

FUN FACT: Interest rates reached their highest point in modern history in October 1981 when they peaked at 18.63%!

*No points purchased. Rates are based on 30 year fixed with excellent credit score and 20% down. This is just an estimate. Rates may vary.

If you would like to know your market value
or find out if it is a good time for you to sell or buy, I am here. Reach out and let’s get started!

REALTOR®
Windermere Real Estate
DRE Lic. #01939667
Phone: 831-818-3050
Email: kara@karabrem.com
Website: www.karabrem.com

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Signs that your neighborhood is about to POP and your property values are about to skyrocket 🚀

*Whole Foods/Starbucks/Target moves in*

Studies have proven that neighborhood amenities have a direct impact on property values. When household-name brands set up shop in your community, it’s usually a good sign as those companies are researching way ahead of time where to go next. Often times their research teams know better than any of us where the next up and coming areas are. These amenities bring traffic into the neighborhood and jobs to the local economy, and make the area more convenient and attractive to prospective buyers.

*Local school scores are increasing*

Whether or not there are children in your family or future, local school scores definitely impact resale value. San Diego is home to some of the best private and public schools in the state and has an inarguable impact on local property values.

*Planter boxes and flower beds start cropping up*

Do your neighbors take pride in maintaining their homes? Do you have a tight-knit community where neighbors look out for each other? Believe it or not, neighborhood pride can increase property values. Property maintenance can be indicative of what your lifestyle will be like in a specific neighborhood, both for you as a homeowner and for future prospective buyers who would rather see a well-manicured lawn and flower pots on the front porch than peeling paint and broken front steps.

*A major corporation sets up headquarters nearby*
When big businesses move to town, they not only bring jobs but also head count. If you have an influx of people moving into your community, there’s going to be more competition for existing homes and possibly more development opportunities for local investors. Not to mention, big corporations want to entice workers and tend to give back to make their surrounding communities a comfortable place to live.

Questions about property values in your neighborhood? Reach out anytime and we can schedule a casual coffee or quick phone call!

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Kara Brem REALTOR®

DRE Lic. #01939667

(831) 818-3050

kara@karabrem.com