Headlines

What’s new in the world of Real Estate

2024 predictions and outlooks came out in droves this week:

• Realtor.com is predicting housing prices to fall by 1.7% in 2024

• They also named their top ten housing markets for 2024

• Zillow released their own 2024 housing market predictions

• U.S. News & World Report looks at what 2024 might hold for commercial real estate

Plus: The 2024 outlook on farmland, industrial real estate stays hot, and more.

Listing of the week: Want to rent a “Fast and Furious” star’s house?

Market Updates

The 2024 Housing Market Forecast from Realtor.com has been released. The major takeaway is despite projecting that mortgage rates will drop to 6.5% by the end of next year, they expect housing prices to fall by 1.7% next year. They also project a further 14% drop in existing housing inventory but that existing home sales will stay flat. If rates are falling and supply is decreasing, why are they expecting prices to fall? A combination of new construction and demand shifting to the rental market, where they expect rents will decrease by 0.2% due to increased supply. Ultimately, the major x-factor will be mortgage rates - if they don’t move in the way this report expects, all the other predictions may miss the target as well.

Toledo, Ohio, took the top spot on the top 10 housing markets for 2024. This ranking also comes from Realtor.com’s 2024 forecast, which projects a 8.3% growth in price and 14% growth in activity for the Midwestern city. At a median price of $200,000, houses in Toledo are less than half the national median price, keeping it an affordable location even with higher mortgage rates. The remainder of the top 10 includes five Southern California cities (among them, Los Angeles and San Diego), where prices have slumped due to higher mortgage rates and are poised for a rebound if they fall next year.

Zillow’s 2024 Housing Market Predictions also foresees a drop in home prices. However, they peg the decline at just -0.2% and believe it will be as a result of increased inventory, differing from Realtor.com’s forecast. Where the two forecasts agree is that rental demand will rise, as Zillow believes single-family rentals are specifically going to see high demand as the housing market remains inaccessible to a large portion of the population. Two final predictions are that home buyers are going to increasingly look at properties that might need some fixing up and that AI is going to start making searching for a home easier for potential buyers.

The 2024 outlook for commercial real estate looks similar to 2023 - challenging. This from a forecast by U.S. News & World Report, which cite high borrowing rates, inflation, a potential recession and hybrid work as factors that will continue to hurt the office and retail sectors. It does see bright spots in multi-family housing, industrial real estate and specialized properties like server farms and cell towers, all of which are still in high demand. Ultimately, there is not likely to be a quick turnaround in the sector next year, and investors and owners need to adjust their expectations and look for ways to differentiate their properties from others on the market.