National Real Estate Update

National Real Estate Update: December 2024

As we close out 2024, the U.S. real estate market remains diverse and dynamic, with varying conditions across regions. While certain areas have seen price stability, others are facing challenges or experiencing growth. Let’s take a regional look at the key trends shaping the market as of December 2024.

As of December 2024, the U.S. real estate market is showing varying conditions across different regions. The Northeast has seen stable prices, especially in cities like New York and Boston, where inventory shortages continue to drive competition. The Midwest remains a strong contender for affordable housing, with cities like Indianapolis and St. Louis experiencing modest price increases. Meanwhile, the South remains the most active region, with Texas, Florida, and Georgia seeing strong demand and rising prices, driven by migration from higher-tax states and continued job growth.

In contrast, the West region is experiencing a slowdown, particularly in cities like San Francisco and Seattle, where price growth has cooled. Affordability remains a challenge, especially in California, with many buyers seeking suburban areas or alternatives in neighboring states. The Pacific Northwest is also facing price declines, but demand for eco-friendly homes continues to rise in markets like Portland and Seattle.

Nationally, the real estate market is influenced by relatively high mortgage rates, which are stabilizing above 7%. This has kept the housing market in check, with many buyers opting for rental properties instead of homeownership due to rising costs. New construction remains robust, particularly in suburban areas and multi-family units, as builders respond to growing demand for affordable housing and rentals.

Northeast Region

Market Trends:
- Stabilizing Prices: The Northeast has seen price stabilization following a strong market in 2023. While home prices in cities like New York, Boston, and Philadelphia have plateaued, they remain high compared to historical averages. However, the overall affordability remains a concern, particularly in suburban markets.
- Inventory Shortages: Inventory remains constrained, leading to continued competition in markets like Boston and New Jersey. Sellers are holding off as they wait for optimal market conditions.
Key Areas:
- New York City: The luxury market remains active, but overall demand has softened. Rentals have surged as professionals return to the city post-pandemic.
- Philadelphia: Slight price growth in 2024, with an uptick in suburban demand.

Midwest Region

Market Trends:
- Affordable Housing: The Midwest continues to be a bright spot for affordability, with prices holding steady or increasing modestly. Many cities are experiencing strong demand for single-family homes, especially in markets like Indianapolis, St. Louis, and Cleveland.
- Strong Rental Demand: Rentals are in high demand, with rising prices in many cities, pushing more people to rent rather than buy.
Key Areas:
- Chicago: The market is somewhat stable, with condo sales making a comeback, especially in the downtown areas. Suburbs remain a popular option due to affordability.
- Minneapolis: Homes in the suburbs have seen price growth, as people seek larger spaces in less densely populated areas.

South Region

Market Trends:
- Continued Growth: The South remains the most active region in the country, with Texas, Florida, and Georgia driving significant market activity. The demand for homes in suburban and rural areas is strong, and new construction continues to rise.
- Rising Costs: In popular markets like Miami and Austin, housing costs have skyrocketed, with little indication of a slowdown in price appreciation.
Key Areas:
- Florida: Florida’s market remains hot, with prices rising in markets like Tampa and Orlando due to high demand from out-of-state buyers. The luxury market in Miami continues to thrive.
- Texas: Austin and Dallas are seeing high price appreciation, with migration from higher-tax states continuing to fuel growth. However, inventory is tight, leading to potential affordability issues.

West Region

Market Trends:
- Cooling Off in Some Markets: While certain West Coast cities like San Francisco and Seattle saw dramatic price increases in 2023, those markets have cooled somewhat in 2024. However, San Diego remains resilient, with strong buyer demand continuing in desirable neighborhoods.
- Affordability Concerns: California in particular faces challenges with affordability, leading many first-time buyers to explore less expensive alternatives in nearby areas.
Key Areas:
- Los Angeles: While the luxury market continues to thrive, price growth has slowed down in general, with more buyers opting for suburban areas like Orange County.
- Seattle: The Seattle market has seen a decline in home prices but remains a competitive market overall, with higher demand for townhomes and condos.
- Denver: Denver is experiencing solid growth in suburban areas, especially with families looking for larger homes.

Pacific Northwest Region

Market Trends:
- Price Declines in Certain Markets: The Pacific Northwest has been facing price corrections in some markets, especially in Portland and Seattle. Economic uncertainty and tighter lending conditions have led to a slow-down in the growth that was once characteristic of these areas.
- Sustainability and Eco-Friendly Housing: Demand for sustainable and eco-friendly homes has grown, particularly in Seattle and Portland.
Key Areas:
- Portland: While inventory is rising, prices are cooling. The rental market is strong, with an increase in demand for multifamily units.
- Vancouver, Washington: Neighboring Portland, Vancouver offers more affordable options and has seen an uptick in buyers from Portland looking for lower taxes and larger homes.

Key National Trends

- Mortgage Rates: As of December 2024, mortgage rates remain relatively high but stable. The Federal Reserve’s actions earlier in the year have kept rates above 7%, leading to continued caution in buyer activity, especially in higher-price markets.
- Renting vs. Buying: The cost of homeownership continues to rise, pushing more people into rental markets. Cities like Chicago, Atlanta, and Phoenix have seen increasing rental prices, as demand for rental properties remains strong.
- Construction Trends: New construction remains robust, especially in suburban and affordable housing markets. Builders are also focusing on multi-family units as demand for rentals grows.

national real estate market in December

The national real estate market in December 2024 is a tale of diverse regional dynamics. While some regions are seeing stable home prices, others face growing affordability concerns. Migration trends continue to shape the market, with the South and West experiencing the most significant growth. Buyers should be mindful of local conditions, including inventory levels, mortgage rates, and the overall affordability of their desired market. Sellers in high-demand areas may still see favorable conditions, while buyers may find opportunities in emerging markets across the country.

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