When work brought my son and his young family back to Orlando in 2023, they became a statistic.
Their modest home in Daphne, Alabama was sold and bought another, more expensive one in the greater Orlando area was purchased. When that occurred, their mortgage payment almost tripled. I know what you’re thinking and yes, it was a great job.
While the future of the real estate market is inherently uncertain, there several trends and potential developments that could shape the U.S. real estate market in 2024:
Continued Housing Demand: The demand for housing is likely to stay with us, driven by factors such as population growth, demographic trends, and the desire for homeownership. However, we still haven’t fully recovered from the supply lag created by the financial crisis, so the balance between supply and demand will remain a crucial factor.
Impact of Interest Rates: Changes in interest rates will significantly influence the real estate market, and while we’ve seen rates come down a bit recently, if interest rates rise, it could potentially cool down housing. This would (and is already) affecting young first-time homebuyers. Lower rates would have the opposite effect.
Technological Advancements: The integration of technology into the real estate industry is expected to advance further. Virtual tools for property transactions, augmented reality for virtual property tours, and blockchain for secure and transparent transactions may become more prevalent.
Sustainability and Resilience: The emphasis on sustainable and resilient real estate development is likely to grow. Both residential and commercial properties may increasingly incorporate eco-friendly features, energy-efficient designs, and climate-resilient infrastructure to align with broader environmental goals.
Adaptation to Remote Work: The impact of remote work on real estate preferences may continue to evolve. As more companies adopt flexible work arrangements, individuals and families may prioritize homes with dedicated workspaces, and the demand for properties in suburban or rural areas may persist. However, from my vantage point, this may have peaked.
Government Policies: Legislative changes and government policies can significantly influence the real estate market. Potential reforms related to housing affordability, zoning regulations, and tax policies will help shape the landscape for homebuyers, sellers, and investors.
Commercial Real Estate Transformation: Commercial real estate will likely undergo further transformations as businesses reassess their office space needs. Adaptive reuse of commercial properties, increased demand for flexible workspaces, and shifts in retail models are already impacting the commercial real estate landscape.
Lastly, let’s not forget that unforeseen events, such as economic shocks, natural disasters, or global crises, can also play a significant role in shaping the real estate market. As 2024 approaches, staying informed about economic indicators, policy changes, and industry trends will be important for a more accurate understanding of what to expect in the real estate landscape.
Wishing you all much peace, good health, and prosperity in 2024!!
Michael P Henderson, CFP® CKA®