Buyers located in the West region of the country were most optimistic in terms of home prices, with 35% saying they expect home prices to decline in 2024—the lowest of any region and down from 43% in 2023. The West region was the only one in which buyers became less pessimistic about home prices in 2024 compared to 2023, although West-region buyers were still much more pessimistic about prices in 2024 than they were back in 2022, when just 7% said they expected home prices to decline for the year. “My colleagues and I feel that we have to offer more than asking price to get a property in good condition,” said Han Zhang, a real estate investor in Southern California who referenced a recent retail market purchase he and another investor made. “The seller received multiple offers, and we had to outbid another cash offer. The asking price was $1.02 million, and we got the deal at $1.08 million.” “It is not an uncommon situation in my area,” Zhang continued. “I feel the inventory is still too low … and I think this situation will remain for the rest of 2024.” Buyers who primarily employ the renovate- and-rent strategy for properties purchased on Auction.com were more optimistic about home prices, with 37% expecting home prices to decrease in 2024 in their local markets. Buyers employing renovate-and- resell as their primary investing strategy were more pessimistic about prices, with 41% expecting a decline in 2024.
SHARE OF LOCAL INVESTORS EXPECTING HOME PRICE DECREASE
2023 SURVEY
2024 SURVEY
35%
32%
29%
27%
25%
22%
17%
16%
15%
14%
Central
Northeast
Southeast
West
U.S. Source: Auction.com buyer surveys
INFLATED HOME PRICES
in 2024, with 31% expecting a decrease compared to 23% of renovate-and-rent buyers expecting a decrease in rents. Overall, local investors purchasing on Auction.com were more pessimistic about rent appreciation in 2024 than they were in 2023, with 29% expecting a decrease in rents in 2024—up from 16% in a 2023 survey. Although buyers located in the West region were least pessimistic about home price appreciation, they were most pessimistic about rent appreciation, with 35% saying they expect rents to decrease in 2024 compared to 2023. That was the highest of any region and up from 22% in 2023. Buyers located in the Northeast were least pessimistic about rent appreciation, with 27% saying they expect rents to decrease in 2024. That was still nearly double the 14% that expected rents to decrease in 2023.
In line with the increasingly pessimistic home price appreciation and rent appreciation expectations, nearly half of buyers surveyed (49%) described their local markets as “overvalued with a correction possible.” That was up from 42% who described their local markets that way in 2023. Slightly more than half of renovate- and-resell buyers (51%) described their local markets as overvalued, and 45% of renovate-and-rent buyers described their local markets as overvalued. Buyers located in the Northeast region were most likely to describe their local markets as overvalued (58%), and buyers located in the Central region were least likely to describe their market as overvalued (41%).
RENT APPRECIATION OUTLOOK
Renovate-and-resell buyers were also more pessimistic about rent appreciation
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