Diablo Gazette February 2024

Dropping Rates: What Will the 2024 Real Estate Market Look Like?

From last year to this year, average home prices in Concord are up 1.6%. In Clayton, they rose four percent. This is not the double digits we saw in years past, but it is not a drop either.

The interest rates, of course, drive prices, and as they become lower, home prices are likely to increase as buyers come back into the market and bid. In that respect, the prognosis for 2024 seems favorable.

The predictions are that the Feds will drop rates again in March; however, even if they don’t, we are in a better position than last year. Last October the high rate was 8.03%, and as of January 4, it dropped to 6.70%. So, the pressure is down at this point.

If the rates hit 5.99% as they did in February 2023, well, you would want your home to be on the market for sale. It would be enticing to buyers who would be anxious to lock up that home before rates pop up again. Perception is everything. Rates going up from 5.5% to 5.99% do not cause a stir but going down from a high of 8.03% to 5.99% is a whole different mindset.

At 5.99% or below — that will be the big month for sales and price increases due to the bidding that is likely to occur for the few homes available to buy. We are still at an all-time low for homes on the market. Some homeowners have 3% interest rates and sitting pat. Do you blame them?

There are a few clients that purchased this year, hoping to lock in a good home price, (buy the home, date the rate) who are also waiting for the rates to drop for a refinance. The refinance market keeps the lenders in business too. My preferred lender sends reminders out to those clients when the rates get below a certain number, to give them the opportunity before things change again. This is a very valuable service.

In fact, if that is your situation, the best thing to do is contact your lender, get your application in with updated documents, and update them monthly. Then when the rate goes down, you won’t miss that rate lock and can refinance.

For this kind of information or what steps to get ready for selling, buying, or investing, 1031 exchanges, rentals, and property management, I want you to have a great real estate experience.

If I were your Realtor, I would say, “Let’s get started.”