Housing sales expected to increase in 2025

In higher housing costs and slower sales, 2024 seem to have more homebuyers sitting it out on the sidelines, but some area realtors say there are signs of a shift coming in the new year. 90s real estate expert Lane Lyon joins us now with a look at what we might expect going into 2025. Lane is a realtor and managing broker at Caldwell Banker Lane. Good morning, Jordan. Good morning. Thanks for having me on. Of course. Merry Christmas to you all. Same to you as we get ready for the new year. We saw so many people kind of sitting it out this year that we're talking about. Do you think because of that we might see pent up demand in 2020? Well, I think it's very likely realtors. In fact, are starting to hear from a lot of their clients. I know mine are starting to say, you know what we're tired of waiting. We're going to jump into this. Economists at Redfin, in fact, have come out and said we, in fact, anticipate that we'll see between 2 and 9% increase in home sales. Next year, a lot of that is just because people have said we are accepting the mortgage rates where they're at right now. This is the part of the data that I'm most intrigued by. Jordan is the fact that they have studied a lot of the home buyers out there and Redfin says most Americans have grown accustomed to the current mortgage rates. I think it signals the fact that that pandemic era ultra low mortgage rates that we were so focused on for so long may finally be a thing of the past. We've realized that, you know what? It's been what, four or five years now. And we've accepted the fact that really our focus should be on what our payments need to be and not so much what the mortgage rates are, because right now mortgage rates really seem to be stabilizing in that 6% range and that really seems to be where they're going to be at. In the meantime, though, we're starting to hear from clients who say, I want to sell next year. I want to buy next year. Quite frankly, I'm tired of waiting. And that seems to be the tone with a lot of clients that we're hearing here in Denver. And Jordan, I might add that seasonally we tend to see our spring markets start to pick up here in Denver as early as January or February. I don't think it's going to be anything dramatic, but we start, we might start to see that folks coming back to the marketplace. Understandable. And also, I mean, you've had four or five years, ample time to kind of adjust to the new prices and start to plan for that as well. And say, OK, I'm ready to make this change and I've accepted that this is where we're at. So what would you say to someone who was on the sidelines who says, you know what, now I'm looking to buy? Sure. So if you're going to need financing, I would say for sure, get pre-qualified. If it's been a while, then since you've talked to your lender, I would say go ahead, reconnect with your lender. Those pre-qualification letters, Jordan, are usually good for about 60 days. So if it's been a couple of months, just reconnect. I would also say it's important to understand what you can afford. You know, the rates are higher. We know that. But so are taxes and interest insurance is what I'm trying to say, not to scare you away, but just make sure you're factoring all that in there as well and seek opportunities. Many of these opportunities are available now. I have to say, if you're looking for a little bit of a deal, I would say think about buying sooner than later, because if this demand starts to come into play, those prices will likely go up and some of those opportunities are available now. Right. You mentioned interest rates and we've actually heard the Fed kind of indicate that there might be two interest rates cuts next year. Do you think or is there any talk that maybe mortgage rates will follow? Gosh, that really is the hope. And I think that's the confusing part is that we see the Fed making these changes, but the mortgage rates are kind of hanging out where they've been. Inflation will be the key factor on that. So we'll watch that very close. I think that we will really the consensus, Jordan, seems to be we will stay in the six percent range if we dip into that five percent range. That's where we anticipate we'll see demand go up. But really, we anticipate stabilizing, normalizing conditions, which from an investment standpoint is when a lot of people seem to make decisions. And again, how long can you wait after a while before you just say never mind? We're out of room. You know, we're having a baby. We're getting a divorce. Whatever it may be, sometimes these things can't wait. And the reality is the marketplace shows all signs for being offering opportunities. Elaine, thank you for your advice. We all appreciate it as always. Have a great holiday. Thank you. Happy holidays to you too.