2023 Summary: The real estate market in 2023 was more subdued than the roller coaster years of 2020-2022. The doubling of interest rates between 2022-2023 put a damper on demand, but it did not totally sideline buyers. As a result, the 2023 market performed better than expected and prices overall stayed strong. This is a continuing indicator that our demand for housing outweighs supply.
2024 Predictions: In 2024, home sellers are predicted to return to the market in the Spring and the number of houses for sale will increase, with a marginal increase in price. We will likely see mortgage rates in the high 5’s by the end of the year, allowing homeowners to feel more confident about selling and leaving their current mortgage rate. The current Kentucky real estate market statistics reflect the national trend of high demand and low supply, which is currently at a 2-month supply in Louisville. Now is the time to get your home ready for the busy Spring and Summer markets.
Median Sales Prices – The rise in interest rates should have caused sales prices to decrease if this were an inventory-neutral market. However, with inventory lacking, sales prices maintained and even rose in many areas because the demand was still high. Nationally, the median sales price in December of 2023 was $382,600 according to the National Association of REALTORS®. This is a 3.4% year-over-year increase. I am expecting a modest increase of 1-1.5% in most areas over 2024 with some high-demand areas reaching 3-5%.
Number of Sales – 2023 had the lowest number of sales since 2008, caused by resale gridlock. According to the National Association of REALTORS, as of December 2023, the seasonally-adjusted annual rate is 3.78 million homes sold. I expect to see an increase in the number of home sales in 2024 with frustrated sellers who wanted to sell in 2022 and 2023 enter the market with the decline in interest rates, but this will not be a substantial increase. For perspective, according to Statista, a record of 7.08 million homes were sold in 2005.
In summary, the 2024 real estate market will provide some relief to mortgage rate-wary sellers and buyers, but challenges with affordability will continue due to elevated demand for the number of homes available in the market. For additional information on our local market, please call or text: 502.435.1150 or send an email to pmcgeecombs@kyselectproperties.com.
