I was surfing around the internet and while visiting multiple news and social media sites I saw nothing but negative news about the current real estate market. There were probably 10 articles about a pending crash in real estate values and equally as many articles about lawsuits pertaining to real estate commissions. All of this negative news was really getting to me, especially since I have never been more optimistic about a coming year in my 23 years as a real estate agent. I started looked for some positive real estate news and found nothing, so here is some.
Let's start with interest rates, this fall interest rates shot up to 8% and it had an adverse effect on home sales but what has not been reported is that interest rates are now firmly is the 6's and many 5 year and 7 year fixed rate loans are actually in the 5's. Even better, the Federal Reserve Chairman announced this week that he was done raising rates and was expecting to start lowering them next year. Early guidance expects rates to finish next year at 5.75% and 5-7 year fixed rates to be in the 4's. So when it comes to interest rates, not only is the worst is over but expect continued improvement.
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This leads me to the next positive news and that would be available homes, there are actually homes available now and you should expect many more to come. There is an extraordinary pent up demand amongst current home owners to move, many homeowners have been putting of selling because they didn't want to give up their 3-4% interest rate, this group of current owners just can't wait anymore, they have house that are too big, too small or too far away from work to stay any longer. Once rates get below 6% these home will be hitting the market fast. Based on the volume of calls and appointments I am booking right now, you can expect that there will be a lot of new inventory coming soon.
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My last piece of good real estate news is prices, this news is actually good for both buyers and sellers. If you are a seller, your home has never been worth more. Usually when home sales slow down, prices will follow. That did not happen as prices rose 3-7% last year in the Kansas City Metro area. If you are buyer this is actually good news for you too, because home prices are leveling off. From the start of the pandemic in 2020 till Spring of 2023 were rising 15% or more annually, so this leveling off along with lower interest rates will make homes much more affordable this coming year.
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