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In today’s real estate landscape, it’s evident that home prices are climbing at an unprecedented pace. With reports of properties appreciating by up to 8% in certain Maryland counties and a consistent buzz of multiple offers, buyers and sellers are navigating a market that remains heated despite challenges like soaring interest rates. This brings us to the three critical factors fueling the escalation in home prices even in 2024.
1. Low inventory. The most significant driver behind rising home prices is the stark lack of available properties. Contrary to expectations, the hike in interest rates didn’t deter buyers; instead, it underscored real estate’s reliability as an investment. This persistence has led to buyers from the previous year enjoying a 5% to 7% increase in equity. The demand for housing remains unsatisfied, with a considerable portion of properties owned outright or at low interest rates, discouraging current homeowners from selling.
2. The rental market squeeze. Rental rates have surged by nearly 30%, pushing many to reconsider homeownership as a more financially viable option. The rise in rental costs, coupled with competitive market dynamics, has made buying increasingly appealing. This shift towards purchasing homes further compresses the already tight inventory, exacerbating the challenge for new entrants into the housing market.
3. The slowdown in new construction. The aftermath of the 2008 financial crisis left builders wary, significantly reducing the rate of new construction between 2011 and 2017. This cautious approach failed to accommodate population growth, limiting new construction as a feasible option for many. Today, new homes come at a premium, about 10% to 20% higher than resale values, making them less accessible for the average buyer.
These factors collectively contribute to the sustained rise in home prices, emphasizing the importance of having knowledgeable real estate professionals by your side. Whether you’re buying or selling, navigating the 2024 market demands expertise and insight to seize opportunities and make informed decisions. In a landscape where strategy is key, aligning with a real estate professional rather than just an agent can make all the difference in achieving your property goals.
Every scenario is different, and our goal is to create the best scenario for you. Schedule a time to chat 1:1 with us to see what you should do. We would love to assist you in any way possible.
