Chelsea, Dexter, and Saline Real Estate Market Predictions 2024

By Jeff Roth, www.arboradvising.com

What Can We Expect in The Real Estate Market For 2024?

A nearly identical market to last year with interest rates being at the new higher normal, inventory will remain low, prices will be higher, and days on market short.

Basically, it will remain dysfunctional.

It is like this because builders did not build enough new houses after the last housing correction in 2008-9 to bring new inventory to the market and understandably so. A lot of builders got hurt then and were lucky to survive.

Couple that with the easy money policy that followed by the Federal Reserve keeping interest rates artificially low culminating in the money printing during the pandemic to drive those rates to lows we will never see again in your lifetime.

Now, many people have a mortgage rate between 2-4% with very little incentive to sell, unless they are forced to or have a very good reason to sell, which further suppresses the inventory of properties for sale.

Honestly, if you have a property that cashflows and a low interest rate mortgage, that mortgage is an asset to you and you should rent your property if you can and use your equity to buy another house using a home equity line of credit or home equity loan if you need to move.

So, what can we expect for the rest of the year?

What Will Mortgage Interest Rates do in 2024?

Currently, the 30-year fixed rate mortgage is sitting around 6.94% which is slightly higher than it was at this time last year at 6.92%.

The above chart tells the story on rates so far this year.

They dipped down a bit in January because the market was anticipating a Federal Reserve rate cut. Then, they went right back up when they realized that was not going to happen as soon as they thought.

Basically, in an election year, they are going to try to make the economy look like it is humming along just fine. The economic data the government is publishing looks strong even though the month after they publish it many times it gets revised lower especially for the new jobs numbers.

As long as the economic data looks strong the Federal Reserve is not likely to cut rates as soon as people hoped.

As a result of the election year financial engineering, mortgage rates are likely to stay at the new higher normal because the economic data looks strong with no reason to lower them to stimulate the economy.

What Will the Inventory of Properties for Sale Look Like in 2024?

The inventory of properties for sale in Washtenaw County will remain low as the beginning of the year shows in the data from the Ann Arbor Area Board of Realtors.

There really isn’t anything forecasted to bring more properties to the market like drastically lower interest rates or terrible economic news.

What Will Prices do in 2024?

As the chart shows, median sales prices are already up 5.2% compared to this time last year, and last year saw prices jump 10.% in Washtenaw County.

Because inventory is so low, prices will remain high and end the year higher.

What Will Happen with Days on Market in 2024?

The result of inventory being so tight is when a property comes on the market that is move in ready it sells very quickly. So days on market will remain low and may even end the year lower as we see in the chart. Days on market are already down 12.1% in February compared to this time last year.

We are not likely to see a rush of new properties hit the market to make days on market rise significantly this year.

What do we Have to Look Forward to in the Real Estate Market for the Rest of 2024?

If you already own a property with a low fixed rate mortgage, your property value will increase and your mortgage payment will remain relatively the same with the exception of your taxes and insurance.

If you are looking to sell in 2024, you will do well.

If you are looking to buy in 2024, you need to look for properties you can add value to if you do not want to pay the list price or over list price and be prepared to move quickly.

If you are a renter, look at comparable rents for similar units and negotiate your rent not to increase or lower it if you can.

Even though this year will look and feel a lot like last year, there are always ways to win.

To Your Success!