We are proud to present you with this synopsis of the national, regional, and localized trends that matter most, found here in our New River Valley 2023 Annual Report.
This 2023 Nest Realty Market Report is our biannual look at what is really happening in the New River Valley, Virginia, real estate market. Last year’s report referenced a tale of two extremes, with interest rates taking homeowners—and home buyers—on a wild ride. While we expected higher interest rates to decrease into the 6% range by the end of 2023, that didn’t happen, and home buyers had to adjust to the new normal.
As noted in our 2022 report, buyers can still get their financing. The more difficult task has been finding available inventory, as local lenders reported that more than 40% of their financing in the last few years had been existing homeowners “locking in” at historically low interest rates. That lock-in effect will likely keep home prices steady in the coming years unless there is a significant regression in demand. Barring that, New River Valley real estate continues to be a solid decision for many.
MARKET OUTLOOK – LOCAL LEVEL
At the beginning of each year, we engulf ourselves in the sales charts, devour the data, look back at goals set, and check in on how our predictions for the past year held true. We do our best to learn from the past and prepare our clients and agents for the new year ahead. 2023 in the real estate market reminded us of the old saying, “The more things change, the more they remain the same.” It was a year of change in the real estate market for sure, but the fundamentals did not change.
What did change in 2023? Mortgage interest rates went up significantly putting some buyers on the sidelines due to affordability. At the end of 2023, mortgage rates trended down over the last four data points. So much so that the National Association of Realtors economists stated that mortgage rates have peaked and could head back to the 6% range early in 2024. Sellers had to price properties more competitively, offer concessions, and homes stayed on the market longer.
What stayed the same in 2023? Home inventory rose minimally over the past year but still remained at historically low levels. Sellers held on to properties longer and new home starts remained significantly under what was needed to help balance the market. The fundamentals of supply and demand remained the largest headwind for the real estate market.
2024 is predicted to be an interesting year for the real estate market. With mortgage rates coming back down, most likely in the 6% range, more buyers are predicted to re-enter the market. This will most likely re-energize buyer competition for the homes listed for sale in 2024.
MARKET OUTLOOK – LOCAL LEVEL
At the beginning of each year, we engulf ourselves in the sales charts, devour the data, look back at goals set, and check in on how our predictions for the past year held true. We do our best to learn from the past and prepare our clients and agents for the new year ahead. 2023 in the real estate market reminded us of the old saying, “The more things change, the more they remain the same.” It was a year of change in the real estate market for sure, but the fundamentals did not change.
What did change in 2023? Mortgage interest rates went up significantly putting some buyers on the sidelines due to affordability. At the end of 2023, mortgage rates trended down over the last four data points. So much so that the National Association of Realtors economists stated that mortgage rates have peaked and could head back to the 6% range early in 2024. Sellers had to price properties more competitively, offer concessions, and homes stayed on the market longer.
What stayed the same in 2023? Home inventory rose minimally over the past year but still remained at historically low levels. Sellers held on to properties longer and new home starts remained significantly under what was needed to help balance the market. The fundamentals of supply and demand remained the largest headwind for the real estate market.
2024 is predicted to be an interesting year for the real estate market. With mortgage rates coming back down, most likely in the 6% range, more buyers are predicted to re-enter the market. This will most likely re-energize buyer competition for the homes listed for sale in 2024.
Visit us at NestRealty.com for more information.