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I missed my own deadline for the Christmas edition of this newsletter and believe it or not several people mentioned missing it. Surprisingly, they weren’t longing for the pithy content or inciteful market analysis. Instead, they just missed seeing the goofy picture of me in the Santa hat. Problem solved! You’re welcome, and here’s to a great start to 2024.
I normally don’t do predictions and as we stare down a year full of elections, ongoing wars and conference realignment this does not seem like the time to start. So, here are a few observations. Interest rates continue to dominate real estate market dynamics, and for much of 2023 high mortgage rates kept us stuck in a logjam caused by large numbers of both buyers and sellers staying on the sidelines. Sellers were unwilling to list their homes and give up their low-rate mortgages and buyers pulled back, frustrated by their reduced buying power.
My hope for 2024 is that the interest rate moderation that we have been hearing about actually happens, and that lower mortgage rates release some of the market’s pent-up animal spirits. The Fed started raising rates almost two years ago and has succeeded in cooling the market, but life moves on and few people can – or want to – put the world on pause indefinitely. For context, the average rate on a 30-year mortgage peaked in late October at 7.8% and is currently hovering around 6.6%. There seems to be a psychological comfort level at about 6% where both buyers and sellers start to get back into the game. As rates move in that direction and folks come to the realization that 3% mortgages aren’t coming back anytime soon, I expect to see inventory start to free up, creating some meaningful movement in the overall market.
As things start to move it will remain critical to have current, accurate local market knowledge in order to make the best possible real estate decisions. Preparation, pricing and marketing will continue to be the keys to achieving great outcomes. Let know how I can help.
That’s a long way around to saying, “Happy New Year”. To all of you who trusted me by transacting, referring or just talking business in the past year, thank you! Here’s to making 2024 the year of getting where you want to be. There’s nothing like the feeling of pulling into your driveway every day happy that you are in exactly the right place.
Cheers!
Rip.
