Is 2024 FINALLY a Buyers Market for Home Buyers?

Summary

In this real estate market analysis, the speaker discusses the transition into a buyer's market, supported by data from Zillow's Market Heat Index. They highlight the temporary nature of buyer's markets and suggest aggressive strategies for buyers, such as making low offers. The conversation with Lance Lambert from Resi Club delves into market dynamics, the impact of new construction, and migration trends. They also touch on the significant weakness in the condo market, especially in Florida, influenced by factors like insurance hikes and regulations post-Surfside collapse. The discussion emphasizes the importance of understanding local market conditions and acting strategically in the current housing climate.

Takeaways

• 🏠 The speaker believes the U.S. has entered a buyer's market, influenced by seasonally slow periods, affordability challenges, and the upcoming election.
• 📈 Lance Lambert from Resi Club discusses the differentiation between buyer's and seller's markets using analytics, highlighting markets like Rochester, Syracuse, and Buffalo as strong seller's markets.
• 🔍 The Zillow Market Heat Index is used to measure market strength, with scores over 70 indicating a seller's market, 45 to 55 as neutral, and under 27 as a buyer's market.
• 📉 The discussion points out that buyer's markets typically last between six to 12 months, whereas seller's markets can last for years.
• 🌐 Regional disparities are noted, with certain areas like the Sun Belt experiencing a cooling effect due to new construction and affordability adjustments.
• 🏢 The impact of people being called back into the office and the 'donut effect' around major cities like New York City is discussed, affecting the housing market dynamics.
• 💼 For buyers in cold markets, the advice is to set up a buy box, determine a day-on-market target, and be prepared to write 'disrespectful offers' to secure the best deals.
• 📈 The script suggests that the current buyer's market window is short and advises doing the necessary work to take advantage of it.
• 📉 Concerns are raised about potential market changes in the coming months, with predictions of lower rates and possible first-time homebuyer programs influencing the market.
• 🏢 The conversation highlights the weaker condo market compared to single-family homes, especially in Florida, influenced by regulations and insurance costs post-Surfside condo collapse.

Q & A

What does the speaker believe about the current housing market?

The speaker believes that the housing market has entered a buyer's market, influenced by seasonally slow periods, affordability challenges, and the uncertainty of an unusual election.

What is the typical duration of a buyer's market according to the speaker?

Buyer's markets typically last between six and 12 months, whereas seller's markets can last for years.

What is the significance of the Zillow Market Heat Index mentioned in the script?

The Zillow Market Heat Index measures the strength of the housing market. A higher score indicates a hotter market favoring sellers, while a lower score indicates a colder market favoring buyers.

Which cities are highlighted as having the strongest seller's markets according to the Zillow Market Heat Index?

Rochester, Syracuse, Buffalo, Albany, and parts of New Jersey and San Jose are highlighted as having the strongest seller's markets.

What factors contribute to the housing market being a seller's market or a buyer's market?

Factors include inventory levels, affordability, migration patterns, new construction, and economic conditions such as tech stock performance and interest rates.

Why might some markets have a 'donut effect' as discussed in the script?

The 'donut effect' occurs when people are called back into the office, leading to a preference for homes in the suburbs or exurbs rather than in the city centers, thus affecting the housing market dynamics in those areas.

What advice does the speaker give to buyers in a buyer's market?

The speaker advises buyers to set a target day on the market, potentially start with offers that are below the asking price, and be persistent in writing multiple offers to secure the best deal.

What is the speaker's concern regarding the housing market in March, April, and May?

The speaker is concerned that after the election and with potential new first-time homebuyer programs and lower interest rates, there might be a significant increase in demand, leading to a spike in the housing market.

How does the speaker suggest the market is different for condos compared to single-family homes?

The speaker indicates that condos have been weaker in the market compared to single-family homes, especially in Florida due to regulations, higher HOAs, and special assessments post the Surfside condo collapse.

What is the significance of the year-over-year change in condo and single-family prices as discussed in the script?

The year-over-year change in prices shows that condos have been generally weaker than single-family homes across the country, with no market showing an increase in condo prices while single-family prices decrease.