We wish you and your families a happy new year and hope the holidays were a good time to travel and to get some rest. 2023 was a very different year in real estate, the most different that we have seen in 20 years in the business. Interest rates were in the upper 6% to 7% ranges, causing Sellers to pause and stay in their homes as the switching costs were simply too high. Despite high interest rates, Buyers’ home buying needs continued as they needed to buy homes for their families. Buyers quickly realized that inventory levels were extremely low, which forced them into bidding situations once again. Economically we made excellent progress on inflation, bringing the rate down from 6% to 3.1%. Economists project that the Federal Reserve will drop rates in Q3 of 2024 and will likely hold steady for Q1 and Q2 of 2024. In anticipation of this, in December lenders lowered the mortgage interest rates to the lower 6% range. The NASDAQ gained 43% in 2023 which is great news for Silicon Valley tech buyers whose down payments and wealth are heavily tied to their employee stock plans. Layoffs have continued but have held steady overall and not in large numbers.
We anticipate 2024 to be a low inventory Sellers’ market this year. Those of you that were buying in 2023, we often asked ourselves the question, “what happens if rates dropped can you imagine the competition then?” In 2024, Buyers will be running into increased levels competition due to these lower rates and positive health of stock portfolios, paired with the economy trending in the positive direction is going to create fierce bidding wars. The hope is that the lower rates will encourage Sellers to move out of their homes so that Buyers have more inventory, but that is never guaranteed in the traditionally inventory stricken high demand area that we live in.
If you are a Seller, 2024 is going to be an even better year for selling real estate depending on where your home is located. As a Buyer, be ready for fierce competition as the lower rates increases the buying your power dramatically as well as that of your competitors. Every market and home type is different so do reach out to us for a more specific analysis of your home. Reach out to us through a direct message or email alan@alanwangrealty.com text or call (408)313-4352 for a personal consultation. Have a great start to 2024!
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