A look back at 2023 sales stats shows a more positive story than you might imagine. Real estate is still a solid investment. Contrary to some predictions, house prices have not “crashed”, at least in our part of the country. On average sold prices were up between 3 and 10% on the previous year. However, the pace of home sales has slowed down – days on market are up across all our office towns, only by 8% (2 days) in Westford but 80% (21 days) in Concord.
Another indicator of demand is the SP:LP ratio – in other words, whether homes are selling for under or over the ask price. Across all towns homes are (on average) selling for 1-6% over the list price, and although this is down on the previous year, it’s a sign for sellers that the market was still tipped in their favor.
All that said, it is true that the market contracted in 2023. The number of single-family homes and condos sold is down year over year in all our office towns – 20% fewer homes sold in Bedford and Acton. But it’s important to note that market volume has dropped by a smaller percentage – from 8% in Lexington to 28% in Winchester – showing demand remained high and drove up prices on the limited inventory.
What’s ahead in 2024? As far as mortgage rates are concerned, we’ve already seen a decrease since the peak in Fall 2023, but most analysts are not predicting any hue drops. Most forecasts are for the rates to remain in the mid-high 6% range for the year. So if you were waiting for rates to come down to pandemic era levels you’ll want to think again. Common wisdom is we should prepare for rates around 5-6% for the foreseeable future and plan our finances accordingly. In a market like ours, where homes are appreciating at up to 10% per year, there is a double impact of waiting – increasing prices and missed equity gain.
So, what are you waiting for? Contact us today to get moving in 2024!