Spring 2024 Housing Market Outlook
Spring 2024 Housing Market Outlook Coastal Association of REALTORS ®
April 24, 2024
Housing Market Trends
2
In 2023, U.S. home sales were at their lowest level since 1995
U.S. Existing Home Sales (000s)
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Source NAR
3
Why were there so few home sales last year?
Mortgage Rates In January 2023, mortgage rates were around 3.5%. By November, they were nearly 8%.
Avg. weekly rate, 30-year fixed rate mortgage
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Source Freddie Mac
4
Why were there so few home sales last year?
Affordability Prices have been rising much faster than incomes in most places. First-time buyers are being priced out in many markets across the nation.
5
Bright MLS Service Area
Sales surged in the Del/Mar Coastal Region in 2020 and 2021
Monthly Closed Sales, Del/Mar Coastal 2019 2020
2021
2022
2023
2024
1,400
1,200
1,000
800
600
400
Jan Feb Mar
Apr
May
Jun
Jul
Aug Sep Oct
Nov Dec
7
Home prices spiked during the pandemic housing market
Median Home Price, Year-over-Year Change, Del/Mar Coastal
10% 15% 20% 25% 30%
0% 5%
-10% -5%
2018
2019
2020
2021
2022
2023
2024
8
Prices up much faster in the Del/Mar Coastal region than in the rest of the country
Wicomico County
Worcester County
$0 $100,000 $200,000 $300,000 $400,000 $500,000
+66%
$410,000
+61%
$250,500
$247,500
$155,000
2018
2023
2018
2023
Somerset County
Sussex County +60%
$0 $100,000 $200,000 $300,000 $400,000 $500,000
$449,000
+41%
$280,000
$176,000
$125,000
2018
2023
2018
2023
9
Condo prices are starting to level out Prices of single-family homes still rising briskly
Median Home Price Index, Del/Mar Coastal 12-month moving average, Jan 2018=100
Detached Townhome Condo
180
160
140
120
100
2019
2020
2021
2022
2023
2024
10
Cash sales on the rise as interest rates remain elevated
Coastal Association of REALTORS ® Share of Home Sales, All Cash
Sussex County Share of Home Sales, All Cash
40%
36.3% 36.0%
33.4% 34.0%
31.3%
30.7%
29.7%
28.7%
30%
28.2%
26.2% 25.2%
25.5%
25.1%
22.0%
20%
10%
0%
2018 2019 2020 2021 2022 2023 Q1 2024
2018 2019 2020 2021 2022 2023 Q1 2024
11
Low inventory continues to be a constraint on the market
Active Listings (End of the Month), Del/Mar Coastal Region Detached Townhome Condo
1,000 1,500 2,000 2,500 3,000 3,500 4,000
0 500
2018
2019
2020
2021
2022
2023
2024
12
Inventory is severely limited across price levels and markets Except at the very high end
Active Listings, End of March Coastal Association of REALTORS®
Active Listings, End of March Sussex County, DE
2019 2024
1,257
1,189
1,007
811
539
326
361
259
233
220
157
104
100
125
46
44
39
38
11
3
Less than $300K
$300K - $599K
$600K - $999K
$1M - $2.49M
$2.5M+
Less than $300K
$300K - $599K
$600K - $999K
$1M - $2.49M
$2.5M+
13
New listings higher than a year ago across the Del/Mar Coastal Region
Monthly New Listings, Del/Mar Coastal 2019 2020
2021
2022
2023
2024
1,600
1,400
1,200
1,000
800
600
400
200
Jan Feb Mar
Apr
May
Jun
Jul
Aug Sep Oct
Nov Dec
14
Number of new condo listings much higher than last year
Monthly New Listings, Coastal Association of REALTORS® Detached
Condos
Townhomes
2023
2024
250
200
150
100
50
0
15
Sussex County has more single-family listings coming onto the market
Monthly New Listings, Sussex County Detached
Condos
Townhomes
2023
2024
600
500
400
300
200
100
0
16
Single-family construction strong in Sussex County Number of permits for new SF homes comparable to 2004
600 Single-Family Building Permits, Sussex County, DE
500
400
300
200
100
0
Source: U.S. Census Bureau
17
Inventory gains more of a balanced market in the Del/Mar Coastal Region
Months of Supply, Sussex County, DE
0 1 2 3 4 5 6 7 2018 2019 2020 2021 2022 2023 2024 Months of Supply, Coastal Association
Balanced market?
2018 2019 2020 2021 2022 2023 2024
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Outlook
19
Weekly Snapshot DEL/MAR COASTAL
Week Ending April 21, 2024
COMPARED TO A WEEK AGO
COMPARED TO A YEAR AGO
2,696
-1.4% +6.2%
Showings
New Purchase Contracts Median Time to Contract
271
+12.0% +14.8%
SUSSEX
33 days +9 days +3 days
272
+14.8% +0.7%
New Listings
WICOMICO
$455,945 +14.1% +6.2%
Median List Price
2,389
+40.8% +1.2%
Active Listings
SOMERSET
% Active Listings with Price Decrease
8.6% +2.0 pp +0.4 pp
21
+50.0% -19.2%
Canceled Listings
pp = percentage point
20
Job growth continues to be strong Unemployment still low but job turnover has declined
1,000 Monthly Change in Total U.S. Employment
500
303K
0
U.S. Unemployment Rate
7%
6%
5%
3.8%
4%
3%
Jan 2021 Apr 2021 Jul 2021 Oct 2021 Jan 2022 Apr 2022 Jul 2022 Oct 2022 Jan 2023 Apr 2023 Jul 2023 Oct 2023 Jan 2024
Source: U.S. Bureau of Labor Statistics
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Overall inflation rate increases to 3.5% Inflation remains higher than Fed’s 2% target
Overall CPI and Wage Growth Percent Change from Prior Year
10% 10%
8%
6%
4%
2%
0%
2019
2020
2021
2022
2023
2024
Source: U.S. Bureau of Labor Statistics
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Expectations for rate cuts shifting Later and fewer cuts anticipated for 2024
Federal Funds Rate
6%
2024 Rate Cuts Expectations
5%
First cut likely not until June/July 2 or 3 cuts rather than 5 to 6 cuts
4%
3%
2%
1%
0%
2018
2019
2020
2021
2022
2023
2024
Source: Federal Reserve
23
Mortgage rate pressure continues Rates topped 7% last week
10 12 14 16 18 20 Avg. rate, 30-year fixed-rate mortgage
2 4 6 8
Source: Freddie Mac
24
Mortgage rates most common deterrent cited by buyer agents Inventory and competing offers also present challenges
Buyer Agents Who Had Another Client Pause/Stop Home Search
Why Buyer(s) Paused/Stopped Home Search Over the Past Six Months Multiple reasons could be named
62.5%
Mortgage rates too high High prices/no home in their price range Unsuccessful offers/competing with cash Could not find the right home Need to save more for a down payment Uncertain about the market Decided renting was a better option Waiting to sell current home Family or health issue Other financial issues Timing (e.g., holidays, school, etc.) Other
61.2%
No 29.5%
55.9%
47.4%
Yes 70.5%
26.0% 25.0%
15.8%
11.8% 10.5% 9.2%
7.2%
3.3%
Bright MLS Subscriber Survey, April 4-11, 2024 n = 431
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Sellers are still out there despite the “rate lock” storyline
Type of Home Sold, March 2024
Family reasons Reasons for Selling a Primary Residence
61.9%
Primary residence
21.2%
17.0%
Wanted a bigger home
14.3%
Rental property
17.0%
Job or career change Wanted a smaller home/downsizing Health reasons
13.5%
Estate sale
12.7%
Second or vacation home
10.0%
3.9%
8.2%
Retirement
Investment property/flip
3.9%
7.3%
Lifestyle preference
Foreclosure/REO/S hort Sale
1.7%
2.1%
Cashing in on equity
4.5%
Other
0.8%
Seller was a builder
Bright MLS Subscriber Survey, April 4-11, 2024 n = 533
Seller outlook improving though still pessimistic Buyer outlook not as rosy as 2023
Buyer and Seller Activity Indices (Not Seasonally Adjusted)
74.2
0 10 20 30 40 50 60 70 80
70.4
68.1
35.1 35.4
28.7
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
2023
2024
Notes: Each activity index is calculated as ((% saying high to very high) - (% saying low to very low) - 1))/2*100 An index above 50 indicates a positive/optimistic outlook. An index below 50 indicates a negative/pessimistic outlook.
Bright MLS Subscriber Survey, April 2023 – April 2024 n = 761 – 1,871 (varies by month)
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Back to Basics What Drives the Housing Market?
• Demand • Jobs
• Supply
• New Construction • Demographics
• Demographics • Mortgage Rates
28
Housing Market Outlook •Demand Jobs Labor market will continue to be strong, but workers may be starting to feel some uncertainty Persistence of remote work will support demand in the Del/Mar Coastal region
29
Housing Market Outlook •Demand Demographics Significant pent-up demand among Millennials
Baby Boomers are in charge of the supply
30
Housing Market Outlook
•Demand Mortgage Rates
Mortgage rates will remain elevated for longer—Federal Reserve, government debt Rates coming down, ending the year still above 6%
31
Housing Market Outlook
•Supply New Construction
Homebuilding activity will continue to be strong into the summer
More price drops, concessions likely
32
Housing Market Outlook •Supply Demographics “Rate lock” will keep some people in their homes longer Life changes will drive supply—retirement, health issues, etc.
33
Risks in the market? Some things to watch in 2024
Risks
• Weaker consumer confidence • Affordability ceiling • NAR settlement
• Global conflicts • Federal government gridlock • Presidential election
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Resources brightmls.com/research
Weekly Market Reports
News & Insights Top 10 Markets Blogs Economic Commentary Migration Patterns Market Competitiveness Demographic Trends On MLS Study
Monthly Market Reports – infographics, video
Monthly Webinars (3 rd Thursdays)
Bright T3 Home Demand Index https://www.homedemandindex.com/
Monthly Subscriber Survey
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Need more information? Contact us!
Lisa Sturtevant Chief Economist lisa.sturtevant@brightmls.com
Erica Plemmons Senior Economist erica.plemmons@brightmls.com
Colby Stout Research Analyst colby.stout@brightmls.com
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