Emerging Trends and Proactive Strategies for the 2024 Housing Market
By Sergio Tiffer
In the challenging real estate market ahead, we can provide helpful advice and ideas to change your approach in 2024. Let’s dive into the emerging trends in real estate and how VOOV’s virtual assistants can help you stay ahead despite a low housing market.
Inside our blog, you will find great real estate market insights. This article has graphs, economic trends, and a Free Guide on the “Top 17 Real Estate Indicators“ with simple explanations.
Important indicators: GDP, Inflation, Fed Rate, Bond, Mortage Rates, Existing Home Sales, and New Home Prices.
The National Association of REALTORS® gathers and puts the indicators in a chart. We made it simpler by adding graphs with brief explanations. It’ll be a great guide to check for your next real estate business plan.
As a Real Estate Professional and VOOV’s CEO, I always use these indicators to get insights for making decisions.
Economic Downturn and Its Impact on Real Estate in Early 2024
Some turbulence awaits the housing market. According to expert predictions, we expect a noticeable economic slowdown impacting the real estate industry. In the 4th Quarter of 2023, the US Real GDP decreased from 3.5% to 1.6%, reducing real estate transactions. This trend will continue with the lowest GDP of 1.3% in the 2nd Quarter of 2024.
Graph 1. Real GDP – US Economy / Economic Outlook Oct. 2022 – 2024
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According to the NAR, Inflation will decrease from 3% in the 4th Quarter of 2023 to 2.5% in the 2nd Quarter of 2024. But it will still be above the target inflation of 2% wanted by the Federal Reserve.
Mortgage Rates peaked in the 4th Quarter of 2023 at 7.8% and will decrease to 6.9% in the 2nd Quarter of 2024. – Not too good for many home buyers! Sadly, the housing affordability for most people is still not there yet.
As the economy weakens and prices increase, Realtors must prepare for a tough winter in 2023-2024. You need a short- and long-term plan to keep moving your real estate business forward.
Slash Costs with Virtual Staffing
Real estate agents must adopt cost-effective strategies in light of these economic shifts. VOOV’s real estate virtual assistants reduce costs by over 55%, saving on employees, office rent, and utilities. This lean approach is especially crucial before the expected housing market decline in winter 2024. Discover more about VOOV’s virtual staffing services here.
Many of our real estate clients have hired our bilingual virtual assistants. Our virtual assistants work in our office under closed supervision and are fluent in English and Spanish. We offer positions such as appointment setters, transaction coordinators, lead generation specialists, or video editors. VOOV has highly competitive fees from $12.50 to $16.25 per hour.
We just launched a new virtual service for clients. You can hire a Transaction Coordinator for $250 per transaction for buyers or sellers. Realtors are cutting costs with virtual staffing and getting ready for the challenging real estate market ahead.
The good thing is that NAR economic experts don’t see a real estate crash in 2024. Instead, they expect a slowdown because of negative events, like high Mortgage Rates and slower economic growth. They forecast mild improvements in the spring of 2024 because of expected lower Mortgage Rates. But if the downturn is lower than expected, it is smart to start reducing costs now.
Mortgage Interest Rates: A Gradual Decline in 2024
NAR experts think the Mortgage Rate will remain high in early 2024. But, they also forecast a slow reduction as the year rolls on.
The Federal Reserve handles the changes in Mortgage Rates by either raising or lowering the Fed Funds Rate. On November 1st, 2023, the Federal Funds rate was between 5.5% to 5.5% to keep reducing the inflation.
In early 2024, experts bet the Federal Reserve will slightly lower the Fed Funds rate to boost the economy. The Mortgage Rates should decline in the 2nd quarter of 2024. In the 2024 spring, there should be a window of opportunity for Realtors to increase some home transactions.
Graph 2. Fed Funds Rate, Prime Rate and Rates 30-Year Fixed Rate Mortgage – US Economy / Economic Outlook Oct. 2022 – 2024
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What to Advise Your Home Buyers for 2024?
Experts expect Mortgage Rates to remain high in 2024, with a slight downward trend from 7.5% in Q1 to 6.3% in Q4 of 2024. Advice: Buy now if possible, as Mortgage Rates may increase because of unforeseen events like inflation or a regional war.
According to a Money US News 2023 survey, two-thirds of potential home buyers wait for rates to go down before buying a house. But, mortgage rates continued increasing throughout 2023 and will remain high in most of 2024.
Buyers could find fewer competitors in the new home construction market. Home Sellers may be hesitant to sell and sacrifice their low mortgage rates. However, most home builders will be happy to close deals. New homes cost more than used homes, but builders may offer discounts or lower interest rates temporarily.
What Tips Should You Give Home Sellers?
The biggest problem facing sellers is that they still need a home once they have sold their present home. And they will have to deal with high mortgage rates and home prices.
The demand still exceeds the supply in this seller’s market. So, home sales prices have stayed high despite buyers grappling with 8% rates. This varies from state to state, but competition remains extremely high in less expensive markets.
Another issue arises for sellers who are also buyers. Homeowners who have lived in their homes for a few years have gained equity. This is because the value of their home has increased significantly. With a successful sale, homeowners (sellers) can use that equity toward their next home purchase. Some home sellers should consider refinancing their mortgage now, as mortgage rates will stay high until 2025.
Falling Government Bond Rates in 2024
The 10-year Government Bond signals investor confidence. When investors lack confidence, bond prices rise, and yields decrease because more people prefer to invest in secure bonds. The bond yields are the bond interests paid to investors by the government.
Falling bond yields show caution in the investor’s markets. This is what we’ll see in early 2024.
Graph 3. 10-Year Government Bond, 30-Year Government Bond /
Economic Outlook 2022-24
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Existing Home Sales: An Upward Trend in 2024
Good news! We expect a nice bump in Existing Home Sales in the first three quarters of 2024. Picture this: Existing Home Sales are climbing from 4,180 to 4,960 (Thousands). This indicator shows the sales and prices of existing single-family homes, condos, and co-ops in the US.
The NAR releases a monthly report on Existing Homes Sales. However, these numbers are lagging indicators because they occur after real estate transactions have closed. This indicator moves after a change in mortgage rates.
The Existing Home Sales number will increase because experts expect mortgage rates to decrease after the 2nd quarter of 2024.
Late 2023 or early 2024 will be a great time to hire low-cost virtual transaction coordinators. Prepare for upcoming leads and mortgage transactions you will complete in the 2nd quarter of 2024.
Housing Market Indicators: Watching Home Sales Prices
When watching the housing prices, it’s crucial to consider the prices of Existing Homes and New Homes. Real Estate investors should understand these metrics to enter the market.
The Existing Home Price is an indicator that shows the average price of homes sold in a specific month. From late 2023 to mid-2024, median home prices consistently drop, suggesting a weaker housing market.
Conclusion: Prepare for the 2024 Economic Downturn
Understanding and adapting to these real estate industry trends is key to navigating the uncertainties of 2024.
As your trusted partner, VOOV offers innovative virtual assistant services tailored for Realtors. We aim to help you streamline operations and stay competitive, even in challenging times. Download the Free 2024 Guide: “Top 17 Real Estate Indicators”, featuring insightful graphs and economic trends.
Let’s tackle the 2024 economic downturn with our virtual assistance and real estate expertise. Contact us for a free personalized consultation on how VOOV can help your real estate business adapt to new trends.
Contact me for questions about the 2024 real estate forecast, and let’s strategize your success with the perfect virtual staff. You may book your call by clicking here.
