As we wrap up 2024, the real estate market has had its share of twists and turns. From rising interest rates testing buyer confidence to the worst year in real estate since 1995, it’s been a year of adapting to change. Existing-home sales have declined for the second consecutive year, with projections indicating the lowest levels in nearly three decades. The current conditions mirror those of the mid-1990s, marking a notable shift from the robust sales figures seen in recent years. Housing inventory remained tight, keeping competition alive, while remodeling trends surged as homeowners opted to upgrade rather than relocate. With design trends leaning into bold colors and natural materials, the industry has proven that innovation and resilience are the names of the game.
Let’s take a look at the stories and trends that shaped this year and peek at what’s ahead!
- Remodel Dilemma: Home improvement spending is stuck in a bit of a renovation rut. High interest rates and inflation have homeowners hitting the brakes on big projects, with experts predicting a 7% drop in renovation spending for 2024. It seems for now, the DIY spirit has turned into "Do It...Later."
- Remodel Makeover: But wait! There's a plot twist--2025 has a better outlook. Lower interest rates could make borrowing less painful, paving the way for homeowners to tap into their large equity and finally tackle those Pinterest-inspired dream projects! Analysts are betting on a $477 billion spending rebound. (Yes, billion. That's a lot of subway tile.)
- Construction Headache: The construction industry is taking hits from all sides, grappling with labor shortages, skyrocketing material costs, and policy shifts that threaten to send builders scrambling. Industry lobbyists are waving the red flag, warning that these challenges could seriously chill new construction--at a time when prices are already near record highs and mortgage rates are doing their best impersonation of a rocket ship.
- Construction's New Administration: While deregulation could provide relieve, it's not the silver bullet. Federal and local regulations add $90K to the cost of a new home, according to the NAHB. However, 13% of the construction workforce is undocumented which is two-times the number of undocumented workers compared to other industries (Pew Research Center) and deportations could create a labor shortage.
- Vibrant Color Palettes: 2024 was the year of bold, vibrant hues as homeowners shift away from neutral tones in favor of deep blues, greens, and purples. These rich, jewel-like hues bring drama and personality to any space, making them a showstopper.
As we step into 2025, the real estate market is expected to navigate a dynamic landscape shaped by evolving economic conditions and buyer preferences. With interest rates stabilizing after recent fluctuations, affordability will remain a key focus, particularly for first-time homebuyers. Urban areas may see a resurgence in interest as hybrid work models continue to influence location decisions, while suburban markets remain strong due to the appeal of larger homes and outdoor spaces. Additionally, watch for the increasing impact of Generation Z entering the housing market, bringing a preference for technology-integrated, minimalist designs. Builders and agents should also monitor supply chain improvements, which could ease construction timelines and costs.
I’m wrapping up the year with an incredible $35 million in sales, proudly continuing as one of the area’s Top Performers—ranking in the top ten agents and top percentiles by sales volume. With an average sale price of $700,000, I’ve expanded my footprint in the luxury market and am beyond excited for what’s ahead. Stay tuned for some amazing resale listings, stunning new build homes, exciting developments, and innovative projects coming your way in 2025. I can’t wait to share them with you! Cheers to a successful year and an even brighter future!