The 2023 market was defined by strong buyer demand reined in by limited inventory. Despite the inventory and interest rate challenges of 2023, buyers persisted. They continue to look for updated and well-maintained homes and when they see them, the nails come out.
Potential sellers have been in a gridlock as they are hesitant to give up their existing low interest rates and capped taxes.
Looking ahead, we expect next year to look similar to 2023. Listing levels will remain low. Prices will hold with slight appreciation. Favorable interest rate adjustments will occasionally inject positive energy.
Looking Ahead to 2024 –
Demand:
As late as November, 55% of all closed sales have been at or above asking price. Buyers continue to compete for listings—a strong indication that demand for quality listings continues to exceed supply. Expect buyer enthusiasm to carry over into 2024. The bottleneck responsible for the 16% drop in sales this year was primarily caused by depleted inventory (quantity and quality). Expect buyer enthusiasm to carry over into 2024 with additional boosts as interest rates adjust down.
Listing Supply:
Compared to prior years, new listings have been slow to arrive and level throughout the year. They didn’t have a mid-year peak. New listings are down 19% compared to last year and 29% compared to the pre-pandemic levels of 2019. The market is in a listing gridlock as potential sellers are reluctant to give up their capped property taxes and low interest rates at a time when there aren’t many buy options once they do sell. Low inventory levels will continue to restrict sales in 2024.
Values:
Prices have been stable and have been following closely to last year’s lead. Through the spring, prices were down slightly and since June, they’ve been up by about the same margin. YTD price per square foot is even with last year and average sale price is up 1%. Expect 2024 prices to follow a similar pattern with a slight increase of one or two percent through the year.
Summary:
Expect inventory levels and sales to remain tight in 2024. Buyers want updated and well- maintained homes. They will continue to wait for and jump on premium listings. Expect more of what we’ve seen this year with a little more energy as interest rates adjust.
