February 2024 Housing Market Update

It's no surprise that buyers love the lower rates, however, sellers haven't committed yet. In November we were close to 9% interest rates with investors looking at percentages typically only seen by hard money loans. As a result, many buyers paused their search.

The new year and lower rates made homes more affordable and as expected more homebuyers resumed their search, the only problem, sellers aren't listing their homes. Further exacerbating the inventory shortage. This year my advice for buyers is the complete opposite of what I normally recommend this time of year.

In 2023…

Last year the average home price increased by 7% despite mortgage rates tripling from 2020. This was because there was so little inventory (-24%). As the rates go down we are expected to get more inventory, however we are also expected to see drastically more buyers. Some analysts even predict that in the New York metro area, the supply and demand balance will worsen, despite a substantial increase in inventory because there will also be a drastic increase in the number of home buyers.

View 2023 Year Recap

BUYERS

Typically I tell my buyers to relax and unless they love a home, let the competition run themselves ragged and get discouraged looking at the “January Homes”. Sit back and enjoy the playoffs while the other buyers stand in long open house lines to see homes that didn’t sell last year. Laugh as the “new year, new home” people get into bidding wars. Wait until the end of February and the new inventory will come, you’ll have options then.

This year I am asking my clients what they are willing to do for their perfect 10/10 property. If at $700k you are not willing to spend $50k- $100k over asking or wait another year and a half to get a home, then it is time we look at 8/10 houses and envision their potential. As rates continue to decrease, home prices will increase. If you purchase now you can refinance (and most lenders are offering free refinancing for the next year) but if you wait for a lower rate the cost of the property will increase and there is no way to lower your payments in the future.

SELLERS

If you haven’t been getting your home ready to sell, what have you been doing? We are going to have an insane spring market which typically starts at the beginning of March. Get your home ready to list so you can take advantage of the plethora of buyers and inevitable bidding wars so you can pocket the most amount of money possible.

RENTERS

If there is any way you can scrape together a downpayment, now is the time to do so. When home values increase, so do rents. If you can’t afford a house, consider a condo. If at all possible, start paying your own mortgage instead of your landlord’s and start building equity.