The mood for buyers and sellers going into 2025 should be optimistic! The year ahead is filled with expectations and hope for a more balanced housing market driven by a nuanced shift away from the frenzied pace of the early 2020’s.  While some challenges will certainly remain, a general increase in the number of available homes for sale and overall slower price growth should create a more favorable environment for buyers and provide more options for sellers who are looking to make a move. Here are a few key factors that will continue to shape the real estate landscape in 2025.

More Choices for Buyers
Expect to see more homes for sale. This increase in inventory will give buyers more options, offer a bit more leverage to negotiate, and potentially reduce the frenzied bidding wars and days of multiple-offer scenarios that plagued so many trying to find the home of their dreams. As an added benefit, all of this should lead to a smoother and less stressful home buying experience.

Home Price Growth Slowing
While home prices are still projected to rise, it is anticipated that it will be at a much slower pace compared to recent years. The mild increase in available homes for sale should help cool down the rapid price increases we’ve seen while preserving and maintaining value for sellers. While this is a glimmer of good news for buyers, sellers may see smaller increases in the value of their home than what they might have expected based on the trends of the last few years.

Interest Rates Impact
While interest rates may remain somewhat elevated, they are expected to stabilize, and more importantly, “normalize”.  A mindset of “normalized” rates may help unlock some of the inventory of homes as sellers see the stability in rates they have been waiting for in order to sell. However, while rates may have stabilized, they do remain relatively high when compared to the previous 3-4 years. As such, this increase in monthly mortgage payments may outprice or make it harder for first-time buyers to enter the market or for existing homeowners who are looking to upgrade.

Shifting Buyer Priorities
With more homes becoming available, an increase in options may finally afford buyers an opportunity to prioritize factors beyond just price, and allow them to place more focus on location, size, and features that better suit their lifestyle. So while that once outdated kitchen might not have been a factor in the past, buyers may prioritize other homes or options that better suit their goals and finances.

As you think ahead into 2025, whether you are contemplating a move or are just curious about the market, please keep in mind that the real estate market is VERY localized.  What one part of the state, county, or city might experience, you may not find to be the same for you. If you have any questions about your home or are thinking about what the buying experience might be like for you, don’t hesitate to contact me directly so that I can answer any questions and create a personalized real estate plan for your needs and goals.

Happy New Year!