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WHAT’S ACTUALLY GOING ON IN THE MARKET RIGHT NOW? Spring 2024


As we say goodbye to another mild New England winter, we are

looking at another early Spring real estate market. Early indicators

suggest that we will see a similar first and second quarter to 2023.

That was a market that saw the fewest sales in over 20 years! If

you think that interest rates played a big factor in that outcome,

then you would be correct...however, probably not for the reason

you are thinking. Sales were not down because of a lack of buyers

looking to enter home ownership (even with 7+% interest rates,)

no, it was the “would be sellers” with the sub 3.5% rates that are

holding back the real estate market. It's easy to see why sellers

are reluctant to double their interest rate, but our market

desperately needs those homes to arrive soon. And I think they will

in 2024.


THE WAITING GAME...

In the last 14+ months I have talked to several clients that no

longer love their living situation, whether it be that they have

outgrown it, the location is no longer ideal, or they are just looking

to make a change. Many of these “would be sellers” have decided

to stay...for now. I believe this will be a temporary snag. Sellers will

only put off selling for so long because of the interest rate alone.

The longer this becomes the norm, the more sellers will adjust and

start to enter the market. I believe we will start to see this in

quarter 2, which aligns with the New England Spring market.


What does this mean for the local market?

If this holds true, then we should see a temporary surge in entry

level homes, particularly condos and starter homes. In many

communities, those homes have had the fiercest competition

during the past 2+ years. In addition, we should see a surge in the

$600-850k range for those families upgrading.



Contingent on Seller finding suitable housing...

Get used to this language as I believe we will see a lot of sellers listing their homes with this term in place. The short definition to this is, that the seller is only agreeing to sell, IF they are able to find another suitable property. This can make things very tricky at the

time of offer, for both seller and buyer, and there are pros and cons to adding this language to any contract. Clear terms MUST be outlined and expectations transparent! This is where my experience

really comes in to play as far as protecting the client. I believe there are much better ways to sell simultaneously, than using this contingency.


WHAT IF? AND IS IT PROBABLE?

What if rates fall to the mid to high 5s? When I first wrote this article,

I thought this was a very possible outcome for 2024, but have since backed

off some as recent reports suggest closer to low-mid 6s . But If rates do dip

into the 5s, there will likely be a market shock. More listings and more buyers

all jumping at once, creating more volume and yes, still more competition. Refis

will start back up and we would be on our way to a more traditional market, as we

come out on the other side of things...although that will probably take time.


In the meantime...

Sellers stand to benefit the most with the current market, as there have been many

properties that have sold for considerably over list price. This is a direct result of the

lack of inventory and high buyer demand. We have no real way to tell when this

opportunity will expire. When it does, sellers will have potentially missed out on a very

rare chance to take fair market value and multiply it by extreme demand. Much like the 3% interest rates, we may never see it at such an extreme again. So, if you have been considering selling to capitalize on the inflated values, it very well may be that NOW IS THE TIME!


CONCLUSION

So much has changed in Real Estate and in the way business is done. In fact, It's incredible

to think how much has changed from just a couple years ago. As always, I pride myself on

staying on top of market trends and having the latest information to form a winning strategy together. If you, or someone you know, may be looking

to buy or sell real estate this year, please reach out any time! You know I will take excellent care of you and those that you refer!

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