The housing market is set to change in 2025, which is why I’m breaking down what the experts are forecasting for interest rates, prices, and demand.
Right now, the No. 1 question I’m getting is, “What’s going to happen to the housing market in 2025?” I get it; a lot of people had plans to move this year but put things on hold due to higher mortgage rates and a slowing market. This begs the question: Will 2025 be any different? The short answer is yes, although there probably won’t be a dramatic shakeup that flips the market on its head. Today, I’m going over what the top experts are forecasting for mortgage interest rates, home prices, and buyer demand in 2025. Plus, I’ll share my insights on how you can get ready for these changes before the new year even starts:
1. Mortgage rates will ease slightly. It’s no secret that higher mortgage interest rates have hurt affordability for buyers and caused our market to slow down. U.S. existing home sales hit a 14-year low in September 2024, and one of the biggest reasons why is that would-be buyers are sitting on the sidelines waiting for rates to drop. While Fannie Mae and Freddie Mac aren’t predicting rates to crash to where they were a few years ago, most experts believe rates will fall below the 6% mark for the first time since Q2 of 2022. Since mortgage rates are a key factor in housing affordability, this is fantastic news for buyers sitting on the fence.
"Buyers need to take advantage of this window before it’s too late."
2. Home prices will increase slightly. While home prices have stagnated recently or even come down in some areas of the country, prices are projected to rise in 2025. Different institutions have varying forecasts, but prices are expected to rise 2.6% when you average their predictions. This is a modest increase compared to what we’ve seen over the last few years, but it projects stability for our market. Homeowners don’t have to worry about prices crashing, while things will stay relatively affordable for new buyers.
3. More buyers will enter the market. Lower interest rates and steady prices mean demand for homes will increase. According to the Senior Economist at Wells Fargo, “Lower financing costs will likely boost demand by pulling affordability-crunched buyers off of the sidelines.” As these buyers enter the market, the pace will speed up. Homes will sell faster, competition will increase, and supply will decrease as more buyers fight over fewer options.
So what does this all mean for you? If you want to sell, 2025 is looking to be a great year for the market, so we recommend you start planning your move now so you can get a head start. On the other hand, buyers need to act fast. There will be a very short window where rates are lower, but home prices haven’t increased yet. If you’d like to plan for 2025, whether you’re looking to sell or buy, please call or email us. We’d love to help you plan your next move!
A lot of homeowners are confused about why they’d ever accept a lowball investor offer, but they provide maximum convenience in exchange for the discount.
Recently, We received a call from a friend asking about a “lowball” offer they received while trying to sell their home. Even though they had priced their home very reasonably, this offer was well below what they were expecting—what was happening? As it turned out, this offer came from an investor.
In case you aren’t aware, offers from investors are becoming more common all across the country. According to Business Insider, 44% of homes were purchased by investors in 2023, and this number is expected to increase.
So, if investors pay below market value for homes, why do so many people accept their offers? Does it make sense for you to consider an investor offer when selling? To answer these questions, today, We're going over three key benefits of investor offers you should consider when selling your home:
1. Investors don’t care about the condition of your home. To get top dollar on the open market, you need to put in a little work. Painting, landscaping, staging, marketing, and more are necessary to truly maximize your sale. If you don’t have the time or money to put in this work, or you just don’t want to deal with the hassle, you might want to consider an investor offer. They will pay for your home as-is, which means they don’t care if it’s a bit of a fixer-upper.
"Investors offer maximum convenience in exchange for a lower price."
2. Investors close quickly. The market is a little slower than it used to be, and this can be a huge hurdle if you need to move as soon as possible. Fortunately, investor sales often move quickly. They’re used to buying homes on a regular basis, and there aren’t many negotiations when selling to an investor since they don’t care much about the condition of your house. They may even be willing to give you flexible closing terms to make it easier for you to find housing after moving.
3. Investors pay in cash. In real estate, cash is king. One of the most common reasons why real estate deals fall apart is because the buyer can’t secure proper financing from a bank. However, you don’t have to worry about that with cash buyer investors. Real estate agents love working with cash buyers because there’s no delay; if they have the money, they can get it to you immediately.
While it might initially seem like an investor is trying to lowball you, the truth is that they provide an option that gives you maximum convenience. If that sounds like something you might be interested in, call or email me, and We can get you a free quote for an instant cash offer on your home. On the other hand, if you’re determined to get the best price possible, We can help get your home ready for the open market with as little stress as possible. We look forward to hearing from you!
Home sales are up 22% and demand is increasing, which is good for sellers.
Is it better to buy or sell in the South Sound market? For buyers and sellers who are waiting for updates about our local market, here’s an overview of what’s happening in Pierce County, which is a good indicator for the entire South Sound region. Today, I’ll be sharing our current data with you through the end of September 2024 to help you decide whether now is the best time for you to enter the market.
Market overview. Our median sale price in Pierce County is $555,900, which reflects a 6% increase in home values compared to last year. This upward trend is showing us that the market is strong, especially for sellers who are pricing their homes appropriately. In fact, homes are selling for an average of 100% of their last list price, given that they are priced competitively.
Days on market. Homes spend an average of 16 days on the market before receiving offers. This slight increase from last year shows a fast-paced market activity. Historically, a 30-day average is considered normal, so we continue to see a strong advantage for sellers in this market.
Sales activity. Pending sales increase by 22% year-over-year, suggesting that we have strong buyer demand. One factor that contributes to this activity is the increase in available homes for sale, which has risen by a whopping 47%.
"We are still seeing many opportunities in the market that you wouldn’t want to miss."
Inventory levels. Although the increase in inventory is encouraging, note that we still have a supply shortage. Right now, our inventory level sits at just 2.1 months, which is below the six-month threshold for a balanced market.
Interest rates. Rates have dropped slightly by 0.7% since our last update, to 6.5%. This drop in rates made homeownership accessible to more people and resulted in a median monthly mortgage payment of around $2,810—about $112 lower than before.
My advice for those who are planning to sell is to enter the market now. Home prices are stable, and buyer demand is high, making it easier for you to make the most of your house. For buyers, we have more options in the market, and the recent drop in interest rates is a good opportunity to buy a house before it becomes a competitive market once again.
We are moving fast into the final months of the year, and we are still seeing many opportunities in the market that you wouldn’t want to miss. So, it’s important to be updated about the shifts happening in our market.
I also want to take this opportunity to invite you to attend our Free Home Seller Workshop for more insights and resources.
If you have any questions or would like to know more about the real estate market, feel free to reach out at (253) 576-3500 or chad@hauerhomes.com. Again, let me know if there’s anything else I can help you with. I’d be happy to help!
Even though our market is slowing down, I’m explaining why we probably aren’t heading for a true buyers market.
Have you noticed a shift in our housing market lately? Homes are taking longer to sell, and prices are volatile nationwide. Depending on where you are, prices could start coming down for the first time in years. This has made many wonder, “Are we finally heading towards a buyer’s market?” My best answer is no; at least, not exactly. Instead, I’d say we’re more likely to head to a balanced market where both sellers and buyers have opportunities if they know what to look for. Here are three things you need to know about our market right now to make sure you get the best deal possible, whether you’re buying or selling:
1. Why is our market balancing out? Despite record-high home prices and shrinking demand, prices aren’t falling in most areas of the country. While these conditions might make it seem like we’re heading for a buyer’s market, the truth is that prices are being kept in check due to low supply. Inventory has increased nationwide, but this hasn’t been enough to offset the persistent lack of supply in most markets. If inventory continues to rise, the market could eventually favor buyers; however, low supply and low demand are offsetting each other.
"We have good reason to believe the market will shift soon."
2. Condition matters. In the current market, there is a huge gap between homes in good condition and those that need work. Due to affordability issues, buyers don’t have extra cash to make repairs after closing. If you don’t make the proper repairs before listing, you could suffer from a lack of demand that makes it feel like you’re in a buyer’s market. On the other hand, if you work with your agent to get your house ready for the market, multiple offers could come in quickly. You might even create a bidding war! Work with your agent and consider a pre-listing inspection, and you can still get an amazing deal on your house.
3. The market may speed up again soon. While lower activity might make you think we’re heading for a buyers market, we have good reason to believe a shift is right around the corner. Due to worse job reports than expected, most experts believe the Federal Reserve will lower interest rates soon. This will make buying a home more affordable and spur new buyer demand. Tons of would-be buyers have been sitting out of the market waiting for rates to drop, so as soon as the news hits, we could see a fresh wave of demand.
There will be tons of competition when the Fed finally drops rates. If you want to avoid potential rate drops or are interested in a free pre-listing consultation, please call or email me. I am always willing to help!
Discussing the key benefits of offering competitive buyer agent rates.
WIn case you don’t know, the real estate world was flipped on its head recently. A lawsuit against the National Association of Realtors is challenging how buyer agents get paid, and it’s left a lot of people confused. Here’s the short version: A court recently ruled that the current structure of buyer’s agents’ commissions was illegal and needed to change. In the past, the seller would pay full commission to their agent, and the seller’s agent would then split that commission with the buyer’s agent. In this way, the buyer wouldn’t actually need to put any money down for their representation. Now, the buyer commissions are negotiated separately from the seller side.
So, do you still need to pay the buyer’s agent’s commissions when selling your home? If you want the best representation possible, yes, and there are a few key reasons why:
1. Setting a rate upfront avoids negotiations. Since buyer commissions are now negotiable, it’s better to get ahead of things and agree to a rate before negotiating. If you wait until closing to negotiate your buyer commission rate, it could become a sticking point that slows down your sale or jeopardizes the translation altogether. You may even have to end up paying extra just to make your buyer happy. Instead, I recommend communicating upfront about what you’re willing to pay to avoid confusion and unnecessary negotiations.
"Set your rate based on comparative home sales in your area."
2. Offering a competitive rate will help your home sell. Just like you look at similar homes in your area to determine your listing price, you should also look at similar buyer’s agent rates in your area to determine how much commission you offer. A higher rate is a sign to buyers that you’re serious about getting your home sold and will probably reduce your time on the market. However, you don’t want to make your rate too high and end up paying unnecessary fees. Work with your agent and look at similar homes in your market to find a Goldilocks rate that isn’t too high or too low.
3. Offering no commission to buyers comes with risks. You may think it makes the most sense to offer zero commission upfront and simply negotiate a low rate at closing; however, this isn’t how things will work in practice. Just because you list your home and offer a 0% rate upfront does not mean you won’t pay any buyer commissions—most buyers will simply ignore your home if they think their representation won’t be compensated. Instead, it means you’ll have to negotiate the rate at closing, which can lead to a drawn-out sale and potentially paying more than you would have otherwise.
I know this topic can be a little confusing, so don’t hesitate to call or email me if you have any questions. Plus, I offer a flexible commission menu so that you can pay for representation no matter what your budget is. I look forward to hearing from you!
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