What’s Ahead For the 2024 Real Estate Market
The world is changing, which means the real estate markets are changing. Factors like the economy, inflation, artificial intelligence and a changing attitude about jobs as they relate to real estate, especially among young professionals, are going to be hugely important to pay attention to as 2024 approaches.
There are a number of factors to consider when looking at the market.
Prices Are Set to Rise
In 2024, prices of homes are set to increase across the country. According to a report from CNBC, homes are not being built and finished fast enough to meet the current demand and the National Association of Realtors estimates that home prices in the United States will rise by 2.6%.
The good news? Though prices are going to go up generally across the country, here in Massachusetts, prices are going to stabilize for the most part based on the latest numbers from Q4 of 2023.
Mortgage Rates Set to Drop
The same report from NAR via CNBC says interest rates are supposed to drop by around 6% in 2024 due to slowing inflation. This is going to have an impact on demand and keep prices relatively high throughout the year. This is a problem, especially for young buyers. Because rates are so high, and the inventory of low-cost, affordable starter homes are low, young buyers who would traditionally be able to buy a home are being priced out of the market.
According to data taken by the US Census, only 11% of homes priced below $300,000 sold in Q1 sold. By April the median price of a new home was $420,800 and the median price for a new home sold was $501,000. Naturally, this means the higher the down payment, the longer it will take for buyers to save up the money making affordable homes exceedingly more difficult to find for first-time buyers.
The Labor Shortage
The NAR predicts that the ongoing labor crisis will have detrimental effects on the real estate market. A report put together by the Counselors of Real Estate states that “jobs determine the demand for real estate and young professionals choose lifestyle first and their job second…” This is a departure from previous generations and it’s becoming clear that “young professionals are showing a preference for remote or contract work”, forcing employers to consider “migration shifts.”
What To Do About A.I.?
A.I. is likely one of the most significant technological developments of the last 50 years. One of the biggest things A.I. is going to do in the real estate industry is help automate it. According to SentriLock VP Andrew Sims, AI-enabled features in their showing service have dramatically increased efficiency.
A.I. is also going to help people find their dream home. In the same article from the NAR, Suzy Julius (SVP of product and engineering at Realtor.com), says they have a feature that allows buyers to get an AI-generated rendering of their dream home. The tool then directs them to real property listings in their area based on that description.