SEATTLE — Experts predict a slow recovery of the housing market in 2024, with interest rates expected to go down slightly and more homes being put on the market.
Cassie Walker Johnson, a Windermere managing broker, said she saw promising signs rounding out 2023.
"Even in the December, November months, open house traffic was really high. The buyers are out there, they really are, we just need to give them the inventory," Walker Johnson said.
Just days before the start of the New Year, Walker Johnson said they're getting ready for new homes to hit the market.
"I think a lot of our sellers right now are prepped and ready to go, and excited to bring on new inventory," Walker Johnson said. "I know our buyers are tired of what's out there right now and they really want some fresh new stuff."
It's a promising sign after the second half of 2023 saw mortgage rates hit 20-year highs and inventory reach record lows.
Economists predict homeowners are ending their holdout for lower rates and are ready to put out a for sale sign.
Windermere Managing Broker Jeremey Johnson said buyers will start to come off the sidelines.
"We have lots of listings in the hopper that are ready to go. I think a lot of people are going to feel like there are better values. My prediction would-be buyers are going to feel like it's a good time to start looking again," Johnson said.
November brought a slight drop in mortgage rates and for 2024, Fannie Mae projects a 30-year fixed mortgage will average 6.7%.
"At Zillow, we expect mortgage rates to continue to ease a little bit, but I always tell buyers don't wait and expect a big drop in mortgage rates," said Orphe Divounguy, Zillow senior economist.
Divounguy said housing prices are expected to remain flat heading into 2024, but affordability is still an issue.
"Unfortunately, Seattle remains unaffordable. For the typical homebuyer, they would have to pay 60.5% of their income in in housing costs on a monthly payment," Divounguy said.
Zillow said that's in part to inventory still sitting below pre-pandemic levels.
"Seattle doesn't build a ton of housing. Other metros across the country, especially in the south, where you saw a lot of new construction coming on, you're starting to see more price, downward price adjustments," Divounguy said.
Divounguy said that is playing a role in migration trends — citing Californians, who also have high housing costs, are moving to states such as Arizona, Texas and Florida.
"They're moving to places that build a lot where you have a bigger mix of available affordable housing and so that for policymakers in the Seattle metro, that has to be the focus," Divounguy said.
Zillow's 2024 housing market predictions also said nationwide, many households will continue to be priced out and said the new starter home will be a single-family rental. Zillow said the demand for single-family rentals will continue to increase next year.
Cassie Walker Johnson and Jeremey Johnson are gearing up for a busy start of the new year.
"I think we'll see it actually started up a bit quicker than we normally do, which is typically springtime. I'm feeling really good about it," Walker Johnson said. "I'm excited, I'm looking forward to next week with the buzz and bustle of everything that happens with the market with activity with our clients."