2025 Sneak Peek: Housing Sales to Rebound?

As 2024 comes to a finish (🥳), the year is set to close with around 4 million transactions — our lowest level since the 2008 financial crisis. For additional perspective, annual home sales over the past 20 years have averaged 5.15 million, peaking at 7 million in 2005. This year's decline was driven by higher mortgage rates, potential sellers holding off and limiting inventory, the Presidential Election, and affordability challenges for buyers. As housing forecasts for 2025 begin to emerge, the chart above highlights some of the current predictions for next year.

Ralph’s Take

Most experts anticipate roughly a 5% growth in home sales next year, though this remains below historical norms. While repeat buyers have shown hesitancy due to higher mortgage rates, life events and changes will eventually drive activity back into the market. The ongoing challenge of limited inventory defined much of 2024, but forecasts suggest an increase in active listings and sales next year.

Westchester Market Tracker 📈

This week’s stats:

• ‘Coming Soon’ Listings: 5 ↓

• New Listings:  148 ↑

• Price Reductions: 67 ↓

• Pending Sales:  164 ↑

• Closed Sales: 171 ↑

Highest Sale: 131 S Bedford Road in Pound Ridge closed for $5,750,000.💰

_{Property Type: Single-Family. OneKey Multiple Listing Service, Inc. 11/15/24 - 11/22/24.}

Older Buyers Are Dominating the Market

First-time homebuyers now represent only 24% of the market, a historic low compared to 32% last year, according to the newly released 2024 Profile of Home Buyers and Sellers report. Additionally, the average age of homebuyers has reached an all-time high of 59, up from 49 in 2023. First-time buyers are now, on average, 38 years old (up from 35), while repeat buyers are averaging 61 years (up from 58). The report covers transactions from July 2023 to June 2024. Key insights include:

• 90% of sellers used a real estate agent (up from 89%)

• 17% of buyers purchased a multigenerational home (all-time high)

• Median down payment: First-time: 9%, Repeat: 23% (Overall 18%)

• 26% of buyers paid cash for their home (all-time high)

• Average seller age: 63 (all-time high)

Ralph’s Take

This year's data underscores the widening income gap between first-time and repeat buyers, with new buyers now needing significantly higher incomes to enter the market. As a result, older buyers are making up an increasingly larger share of the market. The baby boomer generation owns about 38% of the homes in America.

New Home Construction Sending Mixed Signals

October's new home construction data presents a mixed perspective on single-family home building. While home completions rose 16.8% year-over-year, housing starts and permits declined, signaling reduced future inventory. Building permits dropped 0.6% from September and 7.7% from last year, while housing starts fell 3.1% month-over-month and 4.0% annually.

Ralph’s Take

The increase in home completions is a promising sign, offering some relief to current supply pressures. However, the drop in housing starts and permits raise concerns about a slowdown in future inventory, potentially worsening long-term housing shortages if left unaddressed. The National Association of Home Builders (NAHB) is confident that significant regulatory relief may be on the horizon, which could boost the construction of homes and apartments.

Visual of the Week 🖼️

Is Wall Street Buying All the Homes?

Here’s the truth: investors only bought about 17% of homes sold in Q2. That’s down from the 20% high just a few years ago. And on top of that, most investors aren’t big corporations at all. They’re everyday people like your neighbors who just happen to own a second home or rental property.

Mortgage Watch 📉

Today’s average 30-year fixed rate drops slightly from last week, now at 7.03%.

Three-year snapshot of today’s rate: 7.32% in 2023, 6.65% in 2022, and 3.24% in 2021.

> The rate you may be eligible for can vary greatly from the daily average published via Mortgage News Daily. I use this figure as a proxy for how the mortgage market is shifting.

This Week’s Westchester Events

Saturday, November 23rd - Sunday, November 24th:

• 11/23: 60th Annual Thanksgiving Day Parade

• 11/23: Holiday Bazaar Opening Celebration

• 11/23: Shop for a Cause Holiday Boutique

• 11/24: Peter K. Oley Turkey Trot

• 11/24: Pre-Thanksgiving Market

• 11/24: Trudy Dunbar Memorial Turkey Trot

• 11/24: Turkey Trot & Gobbler Race

Continuing Events

• Thru 12/22: Holiday Lane at American Christmas

• Thru 1/5: Holiday on the Hudson

• Thru 12/8: Holiday Train Show

• Thru 12/30:  Lumina Magical Lights

• Thru 1/7: The Great Holiday Train Show

• 11/23 - 12/31: Westchester’s Winter Wonderland

• 11/24 - 12/17: New Rochelle Holiday Market

Farmer’s Markets:

• Saturday: Bronxville (thru11/23), Chappaqua (thru 12/21), Greenburgh (thru 11/23), Hartsdale, Hastings-on-Hudson, Larchmont, Ossining, Peekskill (thru 11/23), Pleasantville, Sleepy Hollow / Tarrytown (thru 11/23)

• Sunday: Irvington (thru 12/1), Mount Kisco, Rye (thru 12/1), Tuckahoe (thru 11/23)

Real Estate Guides - Fall 2024 🍂

Wishing you a wonderful Thanksgiving from my family to yours!

With gratitude, Ralph 🫡

This market is not perfect. I'm here to help.

Schedule a consultation to develop your end-of-year or 2025 game plan.

Email, call, or text message me at (914) 202-1101.