Real Estate Market Update- Spring 2024

Real Estate Market Update- Spring 2024

  • Allison Benham
  • 05/3/24

As the first quarter is over, it's a great time to evaluate the market and see how the year is shaping up.

Interest rates continue to be the hot topic of conversation this year, and they are shaping our market in really interesting ways.

Our experience in the market this year is as varied as the real estate headlines we see.

Take the following two articles from US News and World Report:

US News and World Report- Two-thirds of homebuyers (67%) are waiting for mortgage rates to drop before buying a home this year.

US News and World Report- The Denver metro is the #1 hottest housing market in the US.

How should we interpret this conflicting information? What is really happening in the market? Is it hot or is it crickets? And how did we get to where we are now? Read on for the answers to all these questions.

An Optimistic Start To The Year

We came into this year with the peak interest rates of October 2023 behind us. Rates were steadily decreasing, and buyer interest picked up after the new year. Market sentiment from those in the industry was that we were going to have a very busy year as the buyers who had been sitting out the highest of the rates were rarin' to go.

Many expected the Fed to announce multiple interest rate drops, which would likely further lower mortgage rates, making home purchases much more affordable, setting the market off to the races. What a relief to those making a move in 2024!

Four Months In And Interest Rates Are Going Back Up. Wait, what?

Through the early months of 2024, inflation remained sticky and hard to tame. As inflation numbers failed to fall, mortgage interest rates started to tick back up. Instead of multiple rate cuts, hard-to-tame inflation has not just halted rate-cut conversations; there are now actually discussions around whether another rate hike might be needed. Ooof.

Are High-Interest Rates Affecting Demand?

What is interesting and a bit unexpected is that while higher interest rates are impacting some sales, resulting in large seller concessions and downward pressure on sale prices, this is not true across the board. Even with interest rates at their highest since last fall, we are still seeing many multiple-offer situations.

We have had clients in both situations this year, on both the buying and selling sides. Some buyers got big concessions, and some buyers had to bid against multiple other offers. Some sellers have cashed in with multiple offers, and others have had longer market times.

Should Buyers Wait For Rates To Come Down?

Does it actually make sense to buy now with the high-interest rates? Let's think this one through together. If you were to buy now and...

...Rates come down; you can refi down the road and lower your payment. Yay!


...Rates go up; you locked your rate in before rates went even higher. Yay!


...Rates stay the same; you got your house sooner rather than later. Yay!


Is there any advantage to waiting?

There could be some advantage to waiting for interest rates to come down, and that is in the hope that home prices will come down before rates do. However, it's unclear what might make that happen. Typically, we need to see major job losses to see home values come down by any significant amount, and there isn't any sign that such an event is on the horizon. This is a gamble that theoretically could work but doesn't seem likely at the moment. However, in either case, waiting almost certainly comes with a downside.

Knowing that two-thirds of home buyers are waiting for rates to come down before making a purchase means that as soon as rates do come down, there will be a rush of buyers into the market. When that happens, competition will increase, sending prices shooting up and making it much more challenging to win the house one wants. Maybe one could eventually lock in a lower interest rate, but the gains made there may be offset by paying a higher price for the home and having to agree to less advantageous terms.

How do Sellers Win in a More Balanced Market?

There is no doubt about it, selling a home right now can be more challenging than in years past. Buyers are ready to negotiate and ask for things like seller concessions for interest rate buy downs and concessions for inspection items. 

Sellers should thoroughly prep their homes for sale and if they aren't getting the traffic and offers they want, be prepared to adjust the price if needed. Expect buyers to ask for seller-paid interest rate buy-downs and concessions on inspection.

Knowing that concessions will likely need to given when selling, if sellers are simultaneously buying, they should plan to negotiate hard and get the wins on the buy side to offset what they've given up on their sale.

All this being said, we have had some sellers with some great big wins this year. In this market, multiple different outcomes are possible and we are here to help you interpret the data, make a game plan, and execute on it. If a move is in the cards for you this year, we'd love to strategize with you. As always, don't hesitate to reach out!

Until next time!

Ken and Allison

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