After a year of low inventory and record high prices, 2024 could finally produce some changes (albeit slow) in the real estate market.
New Housing market predictions for 2024 are forecasting a modicum of good news for investors, with improvements in inventory and prices. Unfortunately, mortgage rates will remain stubbornly high, slowing the pace at which real estate will return to some degree of normalcy.
High home prices and mortgage rates will cause investors to be reluctant buyers, with the majority planning to stay the same size, whether by holding onto their current properties or by selling some off while acquiring new ones.
Price drops are expected to be marginal and mortgage rates are predicted to fall, but very little.
Realtor.com recently predicted that mortgage rates in 2024 will average 6.8% for the year and reach 6.5% by year’s end.
It is anticipated that both price and inventory trends will change course in 2024. There will likely be more listings, while at the same time, the increase in supply will create more competition between sellers and help to send home prices back down, to the benefit of buyers.
Homebuyers will be buoyed to see prices start slowly going down. Throughout 2023, prices rose to new record highs almost every month, while homes for sale were sparse thanks to a record low inventory caused by high mortgage rates keeping owners in their current mortgages.
Homebuyers are predicted to benefit from increasing competition among real estate agents in 2024. It’s becoming more common for buyers to skip buyer agents completely and instead work directly with listing agents, possibly allowing them to save even more in commission costs.
Starter homes may be single-family rentals rather than a purchased house, since buyers want amenities like private backyards that even the cheapest homes don’t always offer. Urban areas are predicted to see a surge in renters as the price gap between previously more affordable suburban and urban rental costs continues to narrow. Renting will continue to be a widespread choice in 2024, an ongoing boon for rental property owners.
Accidental Landlords—rental owners who acquired their rental properties due to circumstance, and don’t consider themselves investors—are more prevalent. The reason is that stagnant housing market is motivating some potential home sellers to rent out their properties rather than putting them up for sale until conditions improve.
In 2024, investors will continue to represent the majority of rental owners currently in the market. However, property management companies should expect to see an increase in the number of Accidental Landlords within their client base—particularly because Accidental Landlords are the most likely to seek out a property manager’s help in running their rentals.
The new year will see renters and rental owners demanding more rental processes like payments, maintenance, and communications to be more seamless and convenient.
Renters and rental owners have become much more comfortable with technology over the last few years. Rental owners see the value in doing business with their property management company online, including sending and receiving payments, signing documents, and viewing reports.
Surveys show that 90% of renters would like to complete rental processes like paying rent, submitting maintenance requests, signing leases online, and communicating with their property manager online. This preference cuts across generations, with even 72% of the oldest renters expressing an interest in online rental processes. This creates an opportunity for property management companies to differentiate themselves from the competition through the use of technology.
While 2024 will see fluctuations in many real estate markets, it looks as though property management will remain a high priority. Cousin James Management stands ready as ever to provide the top-tier service and maintenance customers have come to rely upon for the last 26 years. Going beyond traditional property management services, Cousin James provides real estate expertise from investment to leasing and sales.
Contact us and let’s discuss what we can do for you.
Take advantage of our checklist How to Select the Best Property Management Company and download it here.