What's Coming Up in the Next 6-12 Months?

Interest rates are going to be the big story.

They're going to shake things up - how buyers and sellers interact, what kind of inventory we're seeing, how competitive the market gets.

We've got to keep our eyes on what's happening with these trends for late 2024 and early 2025.

If we want to help our clients, we need to understand what's going on and figure out how to work with it.

Pent-Up Demand and Market Shifts

Our Realtor in Residence Barry Jenkins over at Ylopo's got some thoughts on this.

He says, "I think what you'll see in the first half of the first six months is you will see the interest rates drop and homeowners that do want to move but we're waiting because they got a 3% rate and they're seeing 7% rates. They're going to move."

What's he saying? Basically, we might see a bunch of activity as people who've been waiting jump on those lower rates.

But here's the thing - real estate isn't the same everywhere.

“Depending on your market because real estate is hyper local. There could be a couple of different things that happen with the lower interest rates in the second half of the year."

So we've got to think about what this means for our specific area.

The Inventory Question: Supply and Demand

We've got to keep an eye on inventory levels.

As all these people who've been waiting start listing their homes, things could get interesting.

Barry breaks it down:

"At some point everybody that pent up demand, they're all going to list. And so if those homes sell, then you're going to be in a situation where there's going to be a continued stream of new buyers and sellers."

So what could happen? We're looking at two possibilities:

1. Things balance out: If we get enough new listings to match buyer demand, we might see a nice, steady market. Prices could stabilize, and the whole buying and selling process might get a bit more predictable.

2. We run out of homes to sell: On the flip side, if we've got more buyers than sellers, we could have an inventory problem.

"There's a possibility of an inventory problem. So there's not enough sellers and there's too many buyers, which means sellers have all of control."

If this happens, buyers are going to be fighting over homes, and sellers are going to be calling the shots.

What We Can Do as Real Estate Pros

So how do we handle all this? Here are some ideas:

• Get to know your market: Do your homework. Look at what's happened in the past, what's happening now, and try to guess what's coming next. Pay attention to interest rates, who's moving in and out of your area, and what's going on with the economy.

• Teach your buyers: Let them know how interest rates affect what they can buy and what's happening in the market. Help them understand they might face some competition and need to be ready with their financing and offers.

• Help your sellers price right: Work with your sellers to price their homes based on what's happening right now. If it's a hot market, show them how to make the most of it while still attracting serious buyers. Remind them to be flexible, even if they've got the upper hand.

• Mix up your marketing: If buyers have lots of choices, focus on what makes each property special. If sellers are in control, create some urgency around the few homes that are available.

• Find your niche: Maybe focus on types of properties or parts of the market that aren't as affected by interest rates. Think about branching out into property management or helping people invest in real estate.

Keeping the Big Picture in Mind

Yeah, the next 6-12 months might be a bit of a roller coaster with these interest rates.

But remember what Barry says:

"Depending on inventory, that's what you got to watch in looking at this question."

The real estate market goes through cycles, so we've got to think long-term.

If we can roll with the changes, give our clients solid advice, and spot opportunities when they pop up, we'll do just fine.

Stay informed, be proactive, and think strategically - that's how we'll help our clients make smart moves in this crazy market we're looking at for late 2024 and early 2025.

Right now, the U.S. housing market's trying to find its footing after the Federal Reserve hiked up those interest rates.

As of September 2024, things are looking okay, but we've still got some hurdles.

We're seeing some interesting trends, dealing with how those interest rates are shaking things up, and trying to figure out where this market's headed next.