Top 2024 Predictions for Boston Home Buyers
By all calculations, 2023 was a year of deadlock. Largely due to rapidly increasing interest rates, most were not buying or selling a property. In fact, in 2023 home sales were the lowest in almost 30 years. Let that sink in! To couple this, as we get into the 2024 spring market, housing supply vs. demand continues to be a struggle.
Our team got together and decided to make some predictions about how the rest of the year might look for home buyers. Here are some thoughts:
On market home listings in Norfolk, Middlesex, and Suffolk Counties
2023 Jan + Feb | 2024 Jan + Feb | % Change | |
Single Family | 1345 | 1270 | -5% |
Condo | 1198 | 983 | -21% |
Multi Family | 232 | 214 | -8% |
Condos will provide buyers the most options
While the above shows all available home listings down in 2024 vs. 2023 and especially in condos, our prediction is that buyers will continue to have the most options among condos. Not just because of the absolute number of them, but because you will have the most pricing leverage among them as well. In fact, for 2024 overall we predict condos will have the greatest percentage of increase in supply as we get closer to Spring.
Multi-family will be most competitive
Not only are multi-family homes with the lowest available supply, but as a buyer you face demand challenges from additional categories of buyers such as all cash buyers, investors, contractors, and anyone shifting dollars from the stock market to the real estate market. In order to win here, you’ll have to fight for it! There are ways to win here, but be ready to throw down.
Interest rates will dip overall, but not like most predicted in December
A few months ago, the market predicted that in 2024 there would be six rate cuts by the Federal Reserve. Since then, that belief is changing. The Fed is being more cautious and holding to where rates are vs. being aggressive and lowering them. In 2024, our general belief is that rates will continue to hover between 6% and 7% for mortgage borrowers, but averaging near 6.5%. That being said, adjustable rate mortgages will be on the lower end vs. what 30 year fixed mortgage rates may offer.
Home prices will increase, but at a more realistic rate
Home prices will increase the way they used to before the pandemic, in the 2-3% range. There are two reasons we feel this is true. First, inventory available to buyers overall will increase in 2024 vs. 2023, we suspect that since last year’s deadlock, each year more sellers will want or need to ultimately sell. This can be for liquidity purposes or the desire to buy something new. This helps keep prices lower vs. higher. Second, with rates hovering generally at a stagnant range, more buyers will cautiously jump back into the market. They will realize, this could be the new normal for a bit or simply have the need to purchase due to life changes that cannot be put on hold any longer. This helps keep prices higher vs. lower. These two opposite effects we believe will lead to a more normal price increase this year.
As we enter the Spring market in 2024, the real estate landscape is gradually shifting. While these cases are merely our personal predictions, we expect challenges from 2023 to ease with condos becoming favorable for home buyers. However, competition rises in multi-family homes, requiring resilience. Anticipated interest rate dips and realistic home price increases suggest a market where cautious optimism and strategic decisions are vital. Our team is here to offer support and insights for your home buying journey in the coming year. Cheers to new opportunities, successful endeavors, and finding your perfect home in 2024!