2023 was a year of low inventory and high prices in the the Ocean County Real Estate Market. Is there change down the road?
The "mortgage rate lock-in effect," the phenomenon that slowed the industry to a virtual stop and exerted downward pressure on inventory levels resulting in a low number of home sales subsequently putting upward pressure on prices in the last year.
Will 2024 be any different?
“Despite persistent inventory challenges, we anticipate a busier spring home-buying season than 2023,” said Sam Khater, chief economist at Freddie Mac. However, he noted that home prices would likely continue to increase “at a steady pace.”
Some experts forecast that housing market activity will remain tepid throughout 2024 due to the many homeowners who will remain “locked in” at low rates, which will keep a stranglehold on inventory and put upward pressure on home prices.
“Given that approximately two-thirds of outstanding mortgages currently boast rates below 4%, a notable portion of existing homeowners may opt to postpone their buying and selling plans and wait for the potential for even lower rates before making decisions about their next residences,” said Jiayi Xu, an economist at Realtor.com.
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In the meantime, most industry experts agree that the Federal Reserve is done with its rate-hiking campaign to lower inflation. Policymakers kept the federal funds rate unchanged for a fourth straight meeting on January 31 and previously signaled rate cuts are in store for 2024.
Most housing analysts expect sales to improve this year thanks to improving overall market conditions. But not everyone agrees just how much better it will be.
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The most conservative estimate for home sales comes from Realtor.com, which forecasts existing home sales to increase by 0.1% year-over-year. At the opposite end of the spectrum is NAR, which is forecasting sales to increase by 13.5% compared to 2023. In actuality, any increase will probably be in the single digits.
It all goes back to the hope that mortgage rates will continue to edge lower, which Yun says “will bring out more buyers and may even nudge some sellers to list their homes.”
Bottom Line: Low levels of inventory in Ocean County mean that sellers will continue to have the upper hand in the housing market while buyers will struggle to find suitable housing at an affordable price.
The complexities of the current conditions mean that, now more than ever, it’s smart to lean on the guidance of an experienced local real estate agent. If you want to enter the market in 2024, whether as a buyer or a seller, let a pro lead the way for you.
Karl Hess provides expert real estate services to residential buyers and sellers in Ocean County. Contact us today for more information on Ocean County Real Estate and for professional assistance navigating this complex home market.
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