The housing market has had a rocky year, but some places will fare better than others in 2024. Among the markets expected to see a surge in home purchases are cities in California and Massachusetts.
Mortgage rates are predicted to fall from stratospheric heights seen this year, and analysts predict home prices will cool a bit as well, leading some people to take the plunge into homeownership.
Seven of the top 10 markets expected to see a jump in used home sales were in California and Massachusetts, according to Realtor.com.
Oxnard, the San Diego area, Riverside and San Bernadino, Bakersfield, Los Angeles, Long Beach and Anaheim in California are expected to see a significant jump in sales next year.
“These five metros are expected to have sales growth of 13.1 percent, on average, in 2024,” Realtor.com’s analysts pointed out.
These areas are recovering from what was a depressed year for housing sales, particularly in the used homes market. Used homes were hurt by the jump in mortgage rates as homeowners with low rates secured in years past stayed put, nervous about entering a market for a new home where rates are upwards of 7 percent.
Realtor.com pointed out that the California housing market will still struggle to recover from high rates.
“Tempering this good news, in each case, these top California metros are still predicted to have historically low sales levels despite large improvement over depressed 2023 numbers,” they said.
Sales in the California areas were anticipated to be 20 to 35 percent below the years before the COVID-19 pandemic in 2017 to 2019.
Two Massachusetts Cities to See Home Sales Rise
In Massachusetts, Worcester and Springfield will see a rise in sales as well. Worcester will see a 10.5 percent jump in 2024 while Springfield is expected to have sales go up by 9 percent, said the Realtor.com report.
Springfield in particular offers an attractive choice for prospective buyers that may be priced out from its more expensive metro neighbor in Boston, realtor.com analysts said.
In October 2023, the median price listing in Springfield was 56 percent below the median listing price in the Boston metro area.
“Springfield also boasts a rich cultural scene, numerous parks and recreational opportunities, and a strong sense of community,” Realtor.com’s analysts said. “The area is home to respected educational institutions, including colleges and universities, and healthcare, education, government, and manufacturing sectors are top employers.”
Worcester is also attractive as an option for buyers who are finding Boston and even New York too expensive. The median price is about 42 percent below Boston’s and 33 percent lower than in New York and both these areas are contributing to housing demand to the area, according to realtor.com analysts.
“The region’s diverse economy, strong education institutions, and transportation infrastructure further enhance its appeal, while its historical charm and welcoming community make it a desirable place to call home in the Northeast,” they said.
Sales Dependent Upon Economy
Realtor.com experts pointed out that its forecast was dependent on how the economy pans out. If unemployment jumps in these areas, it could push down sales.
Similarly, the fate of mortgage rates could also affect sales. Realtor.com anticipates rates to come down to 6.5 percent by the end of 2024 from their current 7.22 percent level. But if inflation continues to stay higher than the Federal Reserve’s target of 2 percent and central bank policymakers maintain a tight monetary policy environment, keeping rates high, the housing market could suffer.
“Should inflation take longer to tame than currently expected by investors, mortgage rates could take longer to fall and could even increase again,” realtor.com analysts said. “In modeling of an alternative high-rate scenario, these five California metros would see home sales flatten or even decline slightly as buyers in these higher cost and interest-rate sensitive markets re-assess their plans.”
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