2024 Real Estate Review and 2025 National Projections
My dad would always say, "Hindsight is 20/20". I know he did not come up with the saying, but it seemed the most appropriate for what was an interesting 2024.
As a recap: 2024 was expected to be a better year than 2023. Many different opinions were floated, but the consensus was for mortgage rates to decline and sales to increase. Neither of which happened: we finished with a higher-than-starting mortgage rate (6.88% last I checked) and sales hovering around 4.5 million nationally. Inflation seemed to have a mind of it's own, and the Federal Reserve pulled back on the number of projected rate cuts for 2025. It was an election year and followed history with notable decrease in buyer activity. And if you are a Realtor, you dealt with navigating the changes brought upon the lawsuit settlement and buyer concerns on affordability.
Not all was bad in 2024. Homeowners did (again) see appreciation and increased home values. Buyer demand was still there, coming in more (anectodally) at the end of the year. Buyer's were greeted with incremential increases in home supply and longer days on market. More and more buyer's were able to negotiate sales prices & concessions to assist with purchasing a home. They used concessions for rate buy downs or to pay closing costs. Lastly, home equity continued to outgain mortgage debts and foreclosure rates showed a decrease in the 3rd quarter.
So what is "expected" for 2025?
There is a lot of variation in what is expected to happen in 2025. In our area, we are still seeing absorption rates and supply/demand numbers indicating a seller's market (such as the area around the beaches), a neutral market (certain parts on and off the island) and a buyer's market (certain parts of Yulee, Fernandina Beach & Jacksonville). If there is one cautionary tale: make sure you are consulting with someone familiar with your area of interest.
New laws are now in effect for disclosures and reports for those purchasing/owning condominiums. New flood disclosures have been implemented that require sellers to provide information on the flooding history of a property. There is continued modifications to addendums related to the negotiation of commissions/agent fees to help provide more transparency with the settlement changes.
Other forecasts:
- Mortgage rates are forecasted to stay in mid 6% ranges throughout 2025 and have limited impact on increasing buyer activity.
- Home appreciation forecasts are mixed, with a high of 5.5% to low of -0.4%. The average of the biggest 16 forecasters is a 3.3% gain.
- Total home sales to increase above 2024 numbers.
In closing: navigating the buying or selling process in 2025 will continue to require an individualized approach. There are several myths that will prove true or false throughout the year. The best decision is the one made that best meets your goals.
Cheers to another new beginning! 🥂
