How Current Trends Impact Your Real Estate Decisions

By Travis Anderson

In 2011, Travis started his career over and began building his own team; a team that has a different look and feel than most teams in the industry; one built SOLELY for the betterment of the client.

As we review the first quarter’s real estate market, it’s clear that understanding trends and predictions is crucial for both current and prospective homeowners. Here’s a comprehensive look at the current state of the market, including price changes, sales trends, and inventory levels.

In the first quarter of 2024, we saw home prices increase by 2% compared to the first quarter of 2022. This rise is part of a longer trend where, over the past decade, home prices have appreciated by an average of 5.9% per year. This is above the Federal Reserve’s preferred appreciation rate of 4%, highlighting a faster growth in property values than what is typically desired.

Closed sales, however, have shown a significant decrease. From the first quarter of 2014 to the first quarter of 2023, closed sales were down by 13.7%. This decline is even more pronounced when looking at the figures from mid-2022 to now, with sales plummeting to less than 45,000 homes over the last 12 months—a stark drop from the roughly 60,000 homes sold annually between 2016 and 2020.

The supply of available homes, as indicated by the months of inventory, has shown interesting fluctuations. The beginning of 2023 started with just 1.4 months of inventory, which means it would take about 1.4 months to sell all listed homes at the current pace of sales. By the first quarter of 2024, this figure had risen slightly to 1.8 months. Historically, a balanced market—not favoring buyers or sellers—is characterized by about four to six months of inventory. This indicates that we’re still in a seller’s market, though inventory levels are rising.

As inventory levels continue to rise, we may see a shift towards a more balanced market. The increase from 1.4 to 1.8 months of inventory within a year suggests a trend towards more homes available per buyer, which could eventually put downward pressure on prices. This is crucial for buyers and sellers to watch, as the market dynamics could shift, impacting pricing strategies and negotiation power.

The first quarter of 2023 has provided valuable insights into the ongoing shifts in the real estate market. With home prices steadily increasing but closed sales decreasing, coupled with a slow rise in inventory, stakeholders must stay informed and agile. Whether you’re considering buying or selling a home or just keeping an eye on the market, staying updated with these trends is essential.

If you have any questions about the current market or need advice tailored to your specific circumstances, don’t hesitate to get in touch. You can reach us through phone, text, or email. We’re here to help you navigate this complex market and achieve your real estate goals.