There is always a lot of anticipation and curiosity about what the new year holds, and we look to January numbers for any hints of what to expect. The past couple of years we got mixed signals because serious freezes shifted more activity to the spring. Not this year, though I think interest rates are still holding back activity, resulting in a fairly ordinary January.
Speaking of which, here is a graph of interest rates since 2022:
Clearly interest rates are down from their highs last fall, but they were actually higher this January than the previous two. Expectations are that rates will begin to decline later in 2024, but there is much uncertainty about the timing and magnitude of those reductions.
New listings are starting to come to market though the number of new listings in January was lower than January 2023, with new listings priced under 750K dropping 10%.
Buyer activity in January trailed prior years as well, with new pending transactions in January down 2% vs. January 2023.
That said, while the month of January tells one story, this past week tells a very different one. There has been a big uptick in activity that might indicate the beginning of a stronger market. Pendings shot up this week, and while it is just one week’s activity and could drop back next week, I’ll watch this closely over the coming weeks for signs of what the spring might look like.
Finally, inventory in the higher price points remains quite high. Homes priced above 1.5M, which represent around 6% of transactions, show significant inventory currently. But keep in mind that because there are fewer of them, there is a fair amount of volatility in those inventory metrics. These will likely come down a lot in the next couple of months.
If your 2024 plans include buying or selling (or both) real estate in 2024, please contact me for more information on the market and to make a plan.