By: J. Lennox Scott | Chairman and CEO
What you see is what you get!
1 Normal seasonal cycle – just fewer transactions
2 Seasonal ebbs and flow within the yearly housing cycle
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HOUSING
FORECAST
By: J. Lennox Scott | Chairman and CEO
3 Restriction of supply will continue throughout 2024+
4 Sellers will move for the same reasons in 2024
CONVERGENCE
Higher home mortgage interest rates are creating a convergence between two scenarios that are restricting
supply of resale properties coming on to the market in the normal sequence, especially in the more affordable
and mid-price ranges.
Higher home mortgage interest rate
Fewer buyers
(70% have a home to sell)
Result: Fewer Homes for Sale
Homeowners locked into sub 4% mortgage
Some are delaying their move
Fewer sellers
Result: Fewer Homes for Sale
In many areas with fewer homes available for sale and strong buyer activity in the more affordable and mid-price
ranges, there is price support. Additionally, we anticipate price increases where there is a shortage of homes for sale.
6 Phases of the Yearly Housing Cycle™
Represents Number of New Resale Listings by Month
Typical yearly pattern of new resale listings
WHO IS MOVING IN TODAY'S MARKET
Job Transition
Household formation change (Marriage, Divorce, Downsizing, Estate)
Retirees and Seniors (substantial equity)
4+ years in home (major equity)
One third of homeowners have no mortgage debt
Purchase when the timing is right for you.
In your local market, if there is a shortage of supply of available homes for sale, we often see an increase in
home prices after the first of the year, especially in the more affordable and mid-price ranges.
The math may lean toward purchasing today.
Economists are forecasting that home mortgage interest rates will lower over the year ahead.
However, weigh today’s higher monthly home mortgage interest payments against the possible increase in home prices.
Should I purchase today or wait until interest rates come back down?
Again, it’s in the math.
How long are you going to stay in your home?
Roll refinance fee into new mortgage
Payback calculation period is usually less than one year
When is the time to refinance?
Sales Activity Intensity™ Indicator
In a typical year, the Sales Activity Intensity™ of new resale listings going under contract increases one to
two levels in the spring and then mellows back down in intensity over the summer and fall.
Where will home mortgage interest rates be in 2024, and how will that
affect the residential market?
ABOVE 7%
UPPER 6%'s
LOWER 6%'s
Current
Market Conditions
More buyers, a few more listings higher intensity
Many more buyers, a few more listings higher intensity possible
price increase
Several economists are forecasting that 2024 home mortgage interest rates will decrease into the 6%’s
and go even lower in 2025. They either will, or they won’t.
KING COUNTY
SEPARATE MARKETS
Job growth is the #1 major indicator to a strong housing market
Major Metro Market Areas
If there is strong sales activity in major metro market areas, there tends to be more homebuyers that relocate to surrounding/lifestyle/destination markets.
Additionally, those buyers with major home equity are repositioning to these markets for several main reasons:
Closer to family and friends
Lifestyle and environment
Downsizing, second home, investment
LIFESTYLE/DESTINATION MARKETS
Luxury Market
Currently, great selection and great pricing
Starting in the fall, winter clean-up of luxury inventory begins (Several homes will be taken off market and repositioned for spring)
When home mortgage interest rates lower and the wealth effect increases, we will see increased luxury sales activity
Then, musical chairs will happen for selected properties
Chat with your John L. Scott Broker Associate for the following:
For Buyers
Be Buyer Ready, Day One™
If possible, become fully underwritten for a mortgage before purchase agreement.
For Sellers
Be Market Ready, Day One™
Showcase your home in the best light to get the best price.
Seller Listing Launch - Marketing Your Property
Focuses on the backlog of buyers while we meet new buyers entering the marketplace.
Highest Sales Activity Intensity™ is the first 30 days on the market.
®
LIFE EVENTS
THOSE WITH MAJOR HOME EQUITY
