Buying a Home in 2024? I’ve Got Some Thoughts!
While many in the Real Estate world have needed to pivot their businesses dramatically during the 2023 market correction, I have been able to stay steadfast in my favorite Realtor practices: providing education and advocacy, creating relationships, and planning. Sales weren’t as high as years past, but I’m cool with it - I’m proud of my year because I saw through the headlines, still got to welcome families home, and took many meetings with hopeful home owners and sellers looking to plan a strategic move. Referrals are the best gift, all year long!
As the year is coming to a close, there is a lot (too much) to be worried about, made anxious by, and even feel anger towards. The World and its People are crying out, yearning for balance, justice, and peace. What is a person to do/feel/think whilst existing here? I don’t know, but I suspect that part of the answer is “the best they can.”
In the spirit of doing my best, I’m taking time to reflect on the parts of my life over which I have some control and practice gratitude and generosity.
Today’s post is all about painting a big picture for a hopeful 2024 buyer, and I hope it helps you manage your thoughts a bit as you look towards the future.
This year, doom & gloom predictions and record-high interest rates worked hand-in-hand to slow down the wild Pandemic market. Just like during the first holiday season of the Pandemic (winter 2020), we are currently working with about one month’s worth of housing inventory.* Considered alone, this number appears to be bad news - the Market has slowed and Sacramento is no longer the buzziest place to live in the county.
But, a generous lens is best applied to the current real estate market. Property values have not tanked. In fact, price per square foot is up 3% year over year.** In exchanging the red-hot sellers’ market of the Pandemic, we are seeing more equitable terms between Buyers and Sellers, and a large majority of listings selling at their asking price, and not $50k over! Thank goodness.
If you’re a hopeful home owner, I bet you are eager to buy, but nervous to take the plunge amidst lackluster inventory and high mortgage interest rates. Or, maybe nerves have nothing to do with it - perhaps you simply can’t make a monthly payment until interest rates come down. There seems to be a lot of uncertainty and trepidation about buying a home and “timing the market” even though in recent days, interest rates have gone sideways and the Fed is discussing potential rate cuts in the Spring (all good things!).***
When I don’t know what to do in a given situation, I go back to my basics: figure out what I don’t understand and get educated, talk to people who probably know more than me and whose opinions I value, and then I make a plan. As a Realtor, I excel at helping others figure out what to do by educating them, being available to them, and then helping them make a plan.
To get you started, here are some things to keep in mind ahead of a 2024 home purchase. There’s a lot more where this comes from, and I’m here to help when you’re ready to get into it!
New Conforming Loan Limits - effective December 3, 2023, conforming loans in Sacramento County can be as high as $766, 550 for a single family home, and $981,500 for a two-unit property (such as a duplex).**** This means that borrowers can afford more home without putting more money down and being subject to jumbo loan terms (down payment, reserves, and credit guidelines).
Seller Concessions - Today’s buyer can and should expect to deploy concession strategies when writing offers and negotiating with sellers. Common examples include asking for repairs and/or closing cost credits, price corrections, and rate buy-downs. Savvy buyers & sellers know the power a rate buy down, in particular, can wield in keeping seller’s net proceeds high and making a buyer’s monthly mortgage payment a bit more palatable. I always make sure my clients are working with a Mortgage Advisor who understands this important strategy.
Timing the Market is Overrated - If you’re looking for a primary residence where you’re going to live, work, play, cook, decorate for the holidays, raise your babies, snuggle with your dogs, work out, binge watch TV, read books, and host Bunco nights…please don’t think of your home as just an investment. It’s so much more than that. For most folks, home is everything - the foundation of mental, physical, and emotional health. If you wait for rates to hit 5% you’re actually losing out on equity and (probably) not an insubstantial amount of happiness. I want home purchases to pay dividends on your quality of life for years and generations to come. When you focus on timing the market for the absolute perfect economic conditions, you run the risk of letting precious happy-at-home moments slip away.
If you or someone you know is looking to make a move in 2024, it’s never too early to begin those conversations, and I am never too busy for you or your referrals!
Best to you and yours as this year comes to an end.
*Source: MetroList
**Source: MetroList
***Source: Enalynn Ortega, Guild Mortgage
****Source: Risha Kilaru, Origin Point Mortgage
