Real Estate Market Update, Fall 2024

It’s been a hot minute since I provided you with a market update, so buckle up. I have quite a few visuals in store for you today, but I handpicked the ones I thought best illustrated the intricacies of the market.

Today, I’m covering three stories within the housing market:

• The impact of the election, now and in the future (factual & non-partisan),
• The local trends for October 2024, and
• The market predictions for 2025.

Election Impact

Does an election impact the housing market? You can bet your bottom dollar it does! The historical data speaks for itself as researchers revisit historic elections and the year that followed them.

In a non-election year, it’s typical for home sales to take a seasonal decline of 9.8% in October/November. This decline is based on the normal flow of the market – it’s getting cooler, the kids are back in school, people are getting ready for the holidays, etc. People are just overall less likely to be looking to move during this time of the year.

In an election year, that drop becomes 15%. To me, this statistic is sufficient to indicate that elections do impact the housing market. Beyond the people who normally sit out the market in the fall, there’s another segment of the populace not willing to chance the uncertainty that accompanies a potential shift in the political climate.

The trend appears likely to hold for 2024 as 23% of first time home buyers told Redfin they are waiting until after the election to buy.

Perhaps as a result of the election year drop, the data shows the number of home sales increased in the year following an election after 9 out of the last 11 elections. This trend is forecasted to hold true for this election, with additional factors, such as predictions for lower mortgage rates, supporting the proposition.

Beyond the number of sales increasing, prices also went up in every post-election year – except the year following the housing market crash.

Now, yes, I concede the price increase is a trend worth noting, but I am skeptical that this isn’t just our overall trend of year-over-year price increases shining it’s lovely face through the data (i.e. prices go up more often then they go down over time, regardless of election cycles).

Fall Market, I-275 Corridor

If you’re new to our weekly adventures or need a refresher, I always report on the same geographic area when I provide local statistics, which I refer to as the I-275 corridor (shown below). All my data originates from the InfoSparks system, under the ShowingTime umbrella. It includes both single family homes and condominiums.

October home prices continue to trend upward, up another 5.7% over October 2023 and 11.4% over October 2022. The median sales price for this area in October was $370,000. If you look at the trend in graph form below, you can see a exponential upward trend over the last three years. (I’m sure The Mathematician is going to tell me I didn’t use “exponential” correctly.)

If you narrow the focus down to single family homes (no condos), the median sales price in October was $415,000, up 5% from $387,600 in October 2023. This stat is just slightly under the national price of $424,950.

The months supply increased from 1.1 to 1.2, which still has the market hanging out in the seller’s corner. The number of home sales in October was 3,769 homes, which is actually DOWN over last October. I think we may be seeing a little of that election year fall off discussed above.

With the falling inventory, we see an overall drop in the median days that homes sit on the market, from 39 days in October 2023 down to 31 days in 2024. This remains much lower than the national average of 58 days.

Overall, I would say the market has held pretty close to its traditional slump moving into the fall. From my personal experience, the competition is still fierce over homes with updated kitchens and bathrooms. We continue to see many homes with original features hitting the market. Those homes face less interest. They must wait for a buyer who can live with the interior or has the ability to update the home.

Looking toward 2025

Every year we go through this exercise together – forecasting 2025. And, every year, I think I should just purchase a deck of Tarot cards.

The mortgage rates remain the biggest wedge in the housing market. The mortgage rates bottomed out just under 6% in September as the industry eagerly priced in an anticipated rate cut from the Fed. Rates held steady (for about a minute). Then new economic data rattled the markets and rates crept back up closer to 7%.

You can see the jagged lines illustrating the mortgage rates over the last seven years. However, since peaking at the end of last year, the rates have been working on a downward trend. The “experts” project that this trend will continue into the end of 2025, landing us somewhere between 5.5-6%.

Now, let’s take a little journey to illustrate why the rate is so important to the market as a whole. I give you – THE ONE SLIDE. (duh duh duuuuun)

Like the one ring, this slide is the one slide to rule them all. If current homeowners are motivated to buy a new home, this means potentially unlocking inventory and easing the market. In a Bankrate survey, 52% of participants indicated rates would need to be below 6% for them to be motivated to buy. On the flip side, 38% replied with “doesn’t matter, I’m not going anywhere.” This slide is the market in a snapshot.

As far as the number of home sales, they are predicted to rise. Based on the data/projections, it looks like we may get back to a “normal” volume of home sales pushing closer to 2022 numbers.

Okay, I’m going to wrap up with a quick TLDR for you.

The election has everyone in a tizzy. Regardless of who wins the election, home prices will go up and the number of sales will also increase. Our local market remains a seller’s market; houses are not sitting as long as the national average. Mortgage rates might ease a little, but I’m thinking we’re not going to get to 5.5%. We’ll see increased activity as the rates ease but also as a result of people who cannot hold out in their current position as they have for the past two years.

-Dabs

Thanks for joining me this week! As always, I’m here to help with all your homeownership questions, goals and dreams.