What Will the Next Year in Real Estate Bring?
In Arizona real estate there’s a document called the “Market Conditions Advisory” which warns consumers: “The real estate market is cyclical and real estate values go up and down.” It goes on to specify that it’s impossible to predict what will happen in the real estate market…and yet, many try and do just that.
We will never truly know what tomorrow brings in any capacity, let alone economically. All we can do is make guesses based on historical data and current trends and hope we’re right. I think it’s essential for buyers to understand that although it’s exceptionally unlikely, you could buy a house today and tomorrow it loses all its monetary value. That’s nearly impossible, but not entirely.
This isn’t to scare anyone away from buying a home, but to be upfront about the facts. Homeownership is an investment and the world is unpredictable at times. I own a home and I’m all but certain it’s going to gain value over time, but I accept that I don’t control the market. It’s that simple.
I put that all out there to say, I think it’s going to be a good year in real estate. Buyers are finally seeing mortgage rates dip and hopefully a bit more inventory will hit the market once sellers aren’t as afraid to lose their lower rate. Potential first time homebuyers have had a year now to get used to this new market and recognize that the 3% rate may never return. For many homebuyers, continuing to wait to buy might not be the right move.
With a dip in rates comes increased competition, as buyers who were once scared off start returning to the market. My guess is that prices will keep climbing in Tucson, although I hope it isn’t significant. More buyers = more competitive offers, although I don’t imagine we’ll see anything as significant as the $50-100K+ over asking we were seeing at the height of the pandemic.
The market will likely remain a good space for sellers, because inventory is still so low. In Tucson there simply aren’t enough homes for the demand and builders aren’t able to keep up. The result is better offers for sellers who price their home well.
One last thing I’d like to leave you with is the fact that all markets are different. Yes, there are national trends in real estate — and mortgage rates impact us all — but real estate markets and economies are also hyper local. What’s happening in Tucson isn’t the same as Phoenix or Flagstaff and certainly not like San Francisco, Seattle, Atlanta, Detroit, or anywhere else across the country. Within the city there are even mini-markets; in some areas values grow more rapidly and are likely to hold, while there are other locations where year-over-year growth is slow, steady, and eventually plateaus. Basically, don’t let general news about the market impact your decision to buy or sell…figure out what’s right for you by talking with an agent (that’s me!), researching the areas you’re interested, and evaluating your circumstances.
Want to set up a phone call or grab coffee and chat about buying or selling in 2024? Email me at julia@buyselltucsonhomes.com or call/text 520-275-3514.
Julia Van Valkenburg, Realtor
OMNI Homes International
julia@buyselltucsonhomes.com
