What an interesting year 2024 was! I, for one, will say that I am happy it is in the rearview window, but before we altogether (next week) move on to my predictions for 2025 and start living life through the windshield, let’s take a quick look at how my predictions for 2024 fared. Spoiler alert…….The great Carnac I am not. (for those of you who remember Johnny Carson)
Here we go….the predictions are in bold type!
1. Prices will at a minimum hold strong, but likely will continue to increase!
This one was a hit!!
Prices have held strong, and we saw moderate price increases (5%’ish) over the course of the year. Low inventory has been key to prices continuing to hold firm and increase. As long as there is a balance of supply (listed homes for sale) and demand (buyers for those homes), we will likely continue to see modest gains in 2025….but that is a topic for next week’s predictions.
2. Interest rates will be 5.5%’ish by mid-summer.
Big miss on this one!
Interest rates dipped into the high fives for a hot minute several months ago, but the vast majority of the year has been spent between 6.5% and 7.25%. High interest rates are the reason the housing market has been in a standstill for so long, and this will continue to be the case if they remain at these higher levels.
3. Inventory levels will remain tight……a bit higher, but still nothing near pre-pandemic levels.
This one was a hit!
As previously discussed, inventory levels are still considered on the lower end of historical averages. Still, there is no doubt that as 2024 came to a close, we saw inventory levels significantly increasing….but still lagging pre-pandemic inventory levels by 25%. We are likely many years from hitting pre-pandemic inventory levels. For perspective, to be at the pre-pandemic inventory levels, we would need to see summer inventory in the 850-950 units for sale per month, and at this juncture, that seems like a “galaxy far, far away.” For the most part, sellers were more willing to persevere in their existing homes than I had expected. Holding tight to that low-interest loan is the “in thing” because it makes good financial sense.
4. Single-family new construction development will increase because buyer demand sees a significant uptick.
This one was a hit and a miss.
We finished 2024 up in the number of building permits by 30%, but we did not see a significant uptick in overall buyer demand. Overall, building permits were up. There was some increase in new construction buyer activity as inventory stayed low, so buyers were dealing with fewer overall housing options, thus a small uptick in new construction demand. The upper-end, more custom new home builds remained strong, with many builders up to one and a half to two years out for new starts……once again, those with money still have it and appear to be more than willing to spend it.
5. Rental rates will see a decrease!
Nope…another big miss.
Rental rates have seen a modest 5-10% increase over the year, but some back-half-of-the-year stabilization seems to be setting the tone for stability throughout 2025.
6. The Alabama Crimson Tide will rightfully take back their place as the NCAA National Champions in Football and the Denver Broncos will keep Russell Wilson on board and he will return to his old Pro Bowl self!
Holy miss of all misses! Both of these were absolutely terrible predictions.
In my defense, before I wrote this, Nick Saban was still the head coach of the Crimson Tide, but most of us know how that story ended. Had I known he was going to retire I would not have included this one, but needless to say Bama did not win the National Title. As for Russell Wilson….obviously, Denver decided to cut bait with Russ, and I am sure they are 100% glad they did as drafting Bo Nix looks like it will work out fabulously for the Broncos for a long time……and Russell Wilson still sucks….even when “cooking” in Pittsburgh.
As you can see I am hopeful that my predictions for 2025 will pan out better than 2024! As they say….” onwards and upwards.” See you next week.