2024 Real Estate Starts Sluggish: Listings Under Contract Lag Behind

In the current real estate landscape, the number of listings under contract presents a somewhat discouraging picture, with only 8,182 listings reaching this stage after the first seven weeks of the year. This figure falls short when compared to the same timeframe in previous years, with 8,877 listings under contract last year and a significantly higher count of 12,131 two years ago. This trend indicates a sluggish start to the year, raising concerns about the vitality of the real estate market and its ability to rebound or at least match the activity levels of previous years.

Despite a slight improvement in demand since the latter part of 2023, the overall market enthusiasm remains notably muted. The challenges in surpassing or even equalling last year's performance, which itself was not particularly strong, are apparent. The lukewarm demand can be attributed in part to the financial climate, particularly the mortgage rates. With the rates for typical 30-year fixed mortgages climbing above 7%, the anticipation among potential buyers for a decrease to below 6.5% has been met with disappointment. This has understandably dampened the eagerness among prospective homebuyers, making them hesitant to commit to purchases under the prevailing conditions.

Reflecting on the previous year, the market did experience a brief resurgence in April, gaining a momentary momentum that unfortunately dissipated after just two months. This fleeting period of activity provided a glimmer of hope but ultimately failed to sustain a robust market recovery. The transient nature of this recovery highlights the market's volatility and the difficulty in predicting its trajectory based on past patterns alone.

Looking forward to the remainder of 2024, the real estate market's direction remains uncertain. The initial weeks have shown a market that is merely functioning without any significant momentum or noteworthy developments to invigorate market participants. This stagnation leaves industry watchers, investors, and potential buyers in a state of watchful waiting, hoping for a turn of events that could inject some vitality into the market. However, without a clear catalyst on the horizon, the outlook remains cautiously pessimistic, with stakeholders looking for signs of change that could herald a more active and vibrant market.

Keep an eye on other economic drivers since right now housing is in limbo. Looks like unemployment ticking up slightly, inflation with slightly rising, and other countries reporting now they are in recession territory. None of these are guarantees that we will get hit hard, but also do not help the argument that this party can keep going with no consequences. Do your due diligence folks! 

 "If my mind can conceive it, if my heart can believe it, then I can achieve it."
— Muhammad Ali

Have a great week everyone!