2024 Market Predictions: Will Home Prices Drop?

Before delving into the trends, it's important to say that general market dynamics impact individuals differently based on their personal situations and needs. Therefore, don't hesitate to reach out to me for personalized recommendations tailored to your specific circumstances.

With home values and interest rates still being relatively high, both buyers and sellers are wondering what's going to happen to the market in 2024. Typically, home values increase when demand is high and supply is low. Conversely, prices tend to decrease when the housing supply is high and demand is relatively low. So, what will the conditions look like this year? Let’s look at the latest market trends.

What is the Market Currently Like?

Today's housing market is characterized by high prices, high interest rates, and low supply. While high prices are typically driven by strong demand, the current demand is somewhat normal. Inventory is still low, however, which allows sellers to retain higher prices. Since interest rates and home prices are high at the same time, many potential buyers are finding it difficult to afford a purchase.

Will Interest Rates Drop?

The Federal Reserve has steadily hiked interest rates since March 2022 in order to slow inflation. Interest rates held steady from July through December 2023, with mortgage rates dropping slightly, but what can we expect in 2024?

As inflation has improved in recent months and is projected to continue falling in the year ahead, the Federal Reserve has signaled that we could see several rates cuts in 2024. There is still a possibility of rate hikes, depending on inflation and other economic factors, but so far, the outlook is hopeful. Lower rates would make it more affordable to buy a home.

Will Home Prices Drop?

While home value appreciation is expected to slow down, it's not yet clear if home prices will decrease. Given recent trends, some areas may experience a price increase of around 3-4%, while others may see a drop of 1-2%. Prices are directly connected to housing inventory. Unless there is a considerable increase in inventory, home values will remain high.

Will Inventory Improve?

The number of homes on the market is still relatively low and is showing a declining trend compared to the same time last year. To reach a balanced market, around 5 to 6 months of supply needs to be available at a given time. The current inventory is only enough for a 3.4-month supply. It's believed that inventory levels will improve somewhat in 2024, which could help with home prices. However, it is likely that new home construction will not reach healthy levels until 2025.

All the above indicate that home prices are unlikely to drop significantly in 2024. Until we see any significant changes to interest rates, inventory levels, or home prices, it will remain mostly a seller’s market. The market can change quickly though, so if you’re ever curious about our local conditions or want to discuss how the latest market trends may affect you, reach out anytime.

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Home Staging Tips to Make Your Home Shine

When it comes time to sell your home, you want to make sure that you make the best impression on potential buyers. One of the most important steps to prepare for private showings and open houses is to stage your home. By properly staging your home, you'll be able to present your home in the best possible light and create a welcoming atmosphere that will entice buyers.

Depersonalize Your Home

Home staging is all about making it possible for potential buyers to see themselves living in your home. To achieve this goal, think of your home as a blank canvas - remove all personal items that tell buyers that the home belongs to someone else. Begin by removing all personal photos, memorabilia, and knick-knacks, including anything on your refrigerator and walls. Remove or swap out any distracting or provocative artwork. Put away all clothing and put away any personal items in your bathroom.

Do a Thorough Clean

When you're about to place your home on the market, it's crucial that you perform extensive cleaning that goes above and beyond your usual routine. Try to remove all signs of dust and dirt throughout your home. Consider hiring professional cleaners to take care of this task for you.

Remove Clutter

While it's important that every surface in your home is clean, it's also a good idea to declutter your space. Homes are most appealing when they appear to have ample floor space. If you have furniture in every corner of your home, it can make the rooms look smaller than they are. Remove excess furniture and décor so buyers can move around freely.

Make Minor Repairs Where Necessary

Before listing your home, consider making minor repairs that can boost your home’s appeal. Tend to any imperfections that buyers might notice. Try to patch small holes and make scratches less visible. Consider adding some fresh paint to spots where fading has occurred. A handy tip is to remove scuffs from walls with melamine foam eraser sponges. Addressing these small damages lets buyers know that you take care of your home.

Don't Forget Curb Appeal

Even though home staging mainly occurs inside your home, it is also essential to pay attention to the exteriors. First impressions go a long way when you want a potential buyer to make an offer. You can boost your home's curb appeal by adding a fresh coat of paint to your shutters or front door, replacing old house numbers, and cleaning up any flowerbeds/landscaping in your yard. Consider renting a pressure washer to remove dirt from your roof, gutters, and siding.

Effective home staging can make the difference between a buyer making an offer and passing you over. Making a little extra effort upfront can go a long way towards getting the best offer for your home.