2025 is almost upon us and many industry experts are predicting some changes in the market. Let’s take a look at what they’re saying.
1. More Inventory.
According to Altos Research, as 2024 comes to an end, “the available unsold inventory of homes on the market is nearly 27% greater than a year ago. Almost every market in the country has more homes available now than at the end of 2023.”
Judging from the recent uptick in market inventory, most people in the business are expecting at least the first part of 2025 to include inventory increases. Based on my personal upcoming inventory and that of other agents with whom I speak, I feel this will definitely be the case.
2. Interest Rate Uncertainty
Most experts feel we will see rate dips in the coming year, but also predict there is uncertainty as to how many and how much we will actually see. Much depends on the economy.
3. Home Value Growth Slow-Down
According to Zillow, “Expect to see more sales and only a modest 2.6% increase in home value growth in 2025, as the market slowly becomes unstuck.” The reason for this is the increase in inventory that is expected. So we likely will not see home values continue to grow as they have been doing since the Pandemic.
Sellers wanting to sell in the new year should have conversations with their agents as to list value. Here in San Diego real estate is so hot that we likely won’t see such drastic slow-downs, but we get into the second half of the year we may see more of it, so if you are planning to sell this year may not be the time to “list high and see what happens.”
4. Emergence of a Buyer’s Market – ?
Many buyers have been priced out of the market over the last 4 years as prices have risen drastically and we have not seen a buyer’s market in a long time here in San Diego County.
With the introduction of more inventory buyers may have an opportunity to finally get into homes in “affordable markets” (which here means condos and smaller homes in areas outside the coastal zone)…BUT if mortgage rates drop substantially sellers may find themselves in a competitive market, meaning higher sales prices.
2025 should be interesting for real estate. I think we will start with a bang and then the rest of the year will be dependent on mortgage rates and outside factors. If you are considering selling your home you may want to list sooner in 2025, rather than later.