
2024 Housing Market Recap and 2025 Outlook
Looking back, 2024 was certainly an improvement over 2023. As the chart shows, both total sales and selling prices for single family homes increased in 2024. The primary roadblocks remain capital gains taxes, high interest rates, limited inventory, and property taxes, challenges which are expected to persist into 2025.
Buyers:
High interest rates continue to be a major obstacle. While they’re not historically high, the combination of elevated rates and today’s soaring home prices has made it increasingly difficult for buyers to qualify for loans. As a result, many are rethinking their options, turning to townhomes, condos, or homes farther from urban centers with longer commutes.
Sellers:
For baby boomers, capital gains taxes are a key deterrent. Whether retiring, downsizing, or upgrading, the potential of paying hundreds of thousands in taxes often leads homeowners to stay put. Additionally, sellers under 55 face the added burden of higher property taxes on a new purchase, further discouraging a move.
Looking Ahead to 2025
The 2025 housing market is hard to predict, with numerous factors influencing its trajectory. However, a few trends are emerging:
- Inventory Shortages: The ongoing lack of available homes is expected to keep prices steady or push them higher.
- Interest Rates: With no clear indication of substantial rate drops, buyers are adapting to the current environment by exploring creative financing solutions to make purchases feasible.
Advice for Buyers and Sellers
For Buyers:
- Be patient and take the time to find the right property. However, once you do, act quickly—waiting could mean losing out in this competitive market.
- Get pre-approved through a trusted local lender to strengthen your position.
- Stay informed and realistic about the market to set expectations accordingly.
For Sellers:
- Before making any moves, consult with your financial planner and tax professional to understand your options.
- For those with investment properties, a 1031 exchange could be a smart way to defer capital gains taxes.
If you’re thinking of buying or selling, don’t wait to take action. The market is constantly shifting, and making informed decisions early can save you time, stress, and money. Contact me today to schedule a consultation or to get started on your real estate journey—let’s make 2025 the year you reach your real estate goals!