The FED announced potentially 5 rate cuts for 2024. This is already causing home sellers to lower prices.
Home prices in the lower to middle class were OVER-PRICED as sellers didn't want to lose their 3% mortgage.
Now, they think they can just refi into a 5% next year. As this is better than the 8% currently, so they are adjusting their prices to compromise.
They also think prices will skyrocket, so they want to sell NOW and move up to next level before prices go up.
This "sell now, refi later" mentality is currently driving prices lower.
Fortunately, the sellers are wrong in believing prices will go up!
Inventory will balance out prices as more sellers come out, including investors/home-flippers and homebuilders adding to the market.
By December 2024 the moving season will be over, and the extra inventory will just sit there going nowhere. People late to the market will get a good deal.
However, the upper-class properties (3000-4000 sq. foot) will still have high prices as these people have no reason to sell.
There will be no recession forcing them to sell.
No reason to move up to larger home (as these homes are already very large) and lose 3% mortgage.
No reason to downsize to smaller home, as these homes are easy to manage even in older age.
Hopefully the homebuilders will put enough of these homes on the market to keep prices at bay.
The rental market will also see prices come down in the lower to mid-range.
As first-time home buyers leave the rental market more rental homes will become available.
Landlords are going to keep leasing out because they foolheartedly believe prices will go up with rates going down.
This will cause lots of inventory to be available, they will need to lower rents to have income as they wait and wait and wait.
If I'm correct, the IYR will come down as real estate investments will be lame. However, homebuilders and the "Home Depo's" will do great as new home buyers will remodel.
The majority of the market will be strong as we have full employment and another 4-5 years before unions can force wages higher or strike.
Full employment means even more people will be investing in their retirement.
People must invest in the market as social security is on the edge of obsoletion!
Obviously AI is the biggest winner here, so stay in tech as they have the most potential to gain over the next 5 years. Expect the NASDAQ to be WAY OVERBOUGHT!
Due to the fact most companies were bailed out during covid, there are a lot of surviving businesses, they need to advertise...on META, X, etc.
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