As we enter the beginning of March, the 2024 real estate market is showing promising signs of activity, hinting at a bustling spring ahead.
Despite the challenges that have loomed over the market, including high mortgage rates, there’s a subtle yet noticeable shift in the air.
HomeJab, a leading real estate photography company servicing the entire country, has reported a significant uptick in property shoots, a precursor to what could be a more vibrant market in the months to come.
A Glimmer of Hope
In what is typically a slower period for real estate, HomeJab has witnessed a remarkable increase in property shoots, soaring over 35% year-over-year (YOY). This surge is noteworthy because photography shoots are often the first step in the listing process, suggesting that new listings are on the horizon.
Given that these shoots precede market transactions by a few months, we could be on the cusp of an uptick in real estate activity, a welcome change from the previous year, which was marked by a significant downturn in new listings and transaction volume.
The Mortgage Rate Conundrum
However, it’s crucial to temper our optimism with a dose of reality. The persistently high mortgage rates pose a significant barrier to a full-fledged market recovery.
While inventory may increase due to high property prices, the steep interest rates continue to impact affordability, potentially dampening the expected rise in sales. This complex dynamic suggests that while we may not witness a monumental recovery this year, the market is certainly not in decline.
Insights from the Field
Supporting this cautious optimism, a recent Redfin report sheds light on the current state of the market. The report highlights a 10% year-over-year increase in new listings in the four weeks ending February 18, marking the most significant rise in two months.
This uptick in listings comes as sellers aim to capitalize on the 6% year-over-year increase in sale prices, the most substantial gain since October 2022.
Yet, the high mortgage rates, which have recently surpassed 7%, continue to sideline many potential buyers. Mortgage-purchase applications have seen a 10% decline from the previous week, and pending home sales are down 7% year-over-year.
Despite these challenges, there’s a silver lining as Redfin’s Homebuyer Demand Index, a measure of requests for tours and homebuying assistance, has seen an increase from its mid-January low.
The Market’s Adaptation
In response to these conditions, both buyers and sellers are adapting their strategies. Today’s buyers are gravitating towards move-in ready homes to avoid additional expenses on repairs and renovations atop their high monthly payments.
Conversely, sellers are being advised to remain flexible, often needing to accept financial concessions to close deals. Common concessions include mortgage-rate buydowns and covering closing costs, particularly for more affordable homes.
Looking Ahead: Real Estate Market Spring 2024
As we stand at the cusp of spring 2024, the real estate market is showing signs of life, fueled by an increase in property shoots and a cautious increase in listings.
However, the shadow of high mortgage rates looms large, suggesting that while we may not see a dramatic turnaround this year, the market is slowly but surely moving in a positive direction.
As we navigate these uncertain times, the resilience and adaptability of both buyers and sellers will be key to sustaining this momentum.
