Dec 2023 Market Update and 2024 Housing Forecast
In today's video, we will talk about interest rates, market prices, and the housing forecast from local economists for the upcoming year.
The Rate Drop
On December 14th, the Federal Reserve made the announcement to keep rates unchanged. This move led to one of the most significant rate drops in decades, as reported by Mortgage News Daily. While there's speculation about a potential downward adjustment in the federal fund rate in 2024, it's too early to make definitive assumptions. Various factors, beyond inflation numbers, may influence the Fed's decisions. The impact of this announcement was evident by the end of last week, with mortgage interest rates dropping from 7.45% on November 15th, 2023, to 6.64% on December 15th – almost a 1% decrease.
Sold Prices and Market Trends in Northern Virginia
As we assess the December real estate market in Northern Virginia, we find that single-family home sales have experienced a nearly 7% decline from November 2023.
When comparing November 2018's 666 detached homes sold to this year's 444, there is a noticeable decrease of 33%. It's not that homes aren't selling; rather, they aren't entering the market quickly enough.
The median sold price of single family homes was $905K and for townhomes it was just over $610K. The median days on market for single family homes was 9 days and only 8 days for townhomes.
Looking ahead to 2024, we anticipate that if interest rates remain in the sixes or even upper fives, the days on the market will likely remain steady or experience a slight decrease.
The Northern Virginia Association of Realtors® (NVAR), in conjunction with the Center for Regional Analysis at George Mason University (GMU-CRA) issued a NVAR region forecast for 2024.
The report offers insights into single-family and townhome forecasts for Fairfax County, Arlington County, and the city of Alexandria.
Projections for Fairfax County indicate a 3.5% year-over-year price gain for single-family homes and a 4.4% price gain for townhomes.
However, amidst these positive projections, challenges are evident. Total unit sales are forecasted to drop by 9.9%, indicating tightening inventory levels.
Arlington County expects a modest 0.9% increase in medium prices year-over-year, but with a median sold price for single-family homes at $1.25 million in November 2023, finding a home may remain challenging. A significant shift is anticipated in the real estate landscape with a projected 10% drop in total sales.
Townhomes seem to be on an upward trajectory with a 3.4% increase in median sold prices. However, this positive trend is accompanied by a forecasted 26% drop in inventory. These statistics collectively paint a challenging scenario for prospective homebuyers, especially in Arlington County, where the real estate market is expected to maintain its competitive edge.
City of Alexandria
The forecast for the city of Alexandria is challenging since it's a very small market where property prices varie considerably from one neighborhood to another. According to report, single family home prices will moderate and the decreasing inventory will result in a 12% reduction in total sales. Furthermore, the outlook for townhomes indicates a potential 26% decrease in inventory throughout 2024, coupled with a 9.5% year-over-year drop in total sales. The report forecasts a 3.9% increase in townhome prices for the upcoming year.
Navigating the real estate landscape requires careful consideration and planning. Whether you're contemplating a move in 2024 or seeking guidance on market trends, we're here to make your journey stress-free and successful. Contact us today!
This blog and any information contained herein are intended for general informational purposes only and should not be construed as legal, accounting, financial or other professional advice. We take great efforts to ensure the accuracy of information contained here. However, we will not be responsible at any time for any errors or omissions or any damages, howsoever caused, that result from its use. Seek competent professional advice and/or legal counsel with respect to any matter discussed or published on this blog. This blog is not intended to solicit properties.
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