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US Real estate markets to watch in 2024: Inventory and affordability

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A stubborn lack of inventory and high mortgage rates kept many prospective homebuyers at bay for most of 2023.

Homeowners are holding on to their homes – and the sub-5% mortgage interest rates – instead of selling their homes to buy another at today’s elevated rates. With 85% of homeowners locked into pandemic-era low interest rates, it’s not surprising that existing home sales were down 15% year over year in October. Housing inventory was down 6% during the same timeframe.

But with mortgage rates steadily dropping over the past six weeks, averaging 7% for a 30-year fixed mortgage, down from nearly 7.8% at the end of October, experts believe 2024 could be the year that prospective homebuyers finally catch a break.

Which markets are poised to see the strongest combined increase in home sales and listing prices in the coming year?

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Five of this year’s top 10 metro areas are in Southern California, which is projected to perform better than the state as a whole. These markets will see an estimated average sales growth of 13.1% in 2024, compared to a sales decline of 4.1% for other California areas in the top 100, according to an analysis by Realtor.com. The other five markets offer relative affordability compared to the national median home price – especially in the Midwest and Northeast.

“Now that we’re seeing the beginning of an affordability turnaround, home buyers are still looking for markets where they can capitalize on lower prices,” says Realtor.com Chief Economist Danielle Hale. “Even in some of the more expensive markets, we’ll see double-digit sales growth as sales start to rebound from their historic lows, helped by mortgage rates which are expected to finally relent.”

Greater percentage of homeowners without a mortgage

The top markets in Midwestern and Northeastern states are more affordable, with all of the top five markets in those areas except for Worcester, Massachusetts, showing median listing prices lower than the national average. In these areas, 37.9% of homeowners live in homes without a mortgage, which insulates them from the impact of higher interest rates. Their local economies are fueled by education, health care and manufacturing, which, except for Toledo, Ohio, are projected to have strong enough job growth to keep unemployment below the estimated national average of 4.2% at the end of 2024. These areas also have a high quality of life, with recreation, culture and education that’s appealing to homeowners, according to the report.

The California dichotomy

Five California metros have made the top 10 list of housing markets but none are in the Bay Area or among Northern Californian metros. The top five Californian metros are Oxnard, San Diego, Riverside, Bakersfield and Los Angeles. These five areas are expected to have sales growth of 13%, on average, in 2024, compared to an average decline of 4% for other Californian metros in the largest 100 list.

However, these top California metros are still predicted to have historically low sales levels despite large improvements over depressed 2023 numbers. Mirroring national figures expected to total roughly 25% below 2017-2019 norms, sales in these Californian metros are also expected to be 20% to 35% lower than the typical pre-pandemic year from 2017 to 2019.

2023 top housing markets

1. Toledo, Ohio

November 2023 median home price: $200,000Forecasted 2024 home sales change: +14%Forecasted 2024 home price change: +8.3%Forecasted 2024 combined sales and price change: +22.3%

Oxnard, California

2. Oxnard, California

November 2023 median home price: $1,037,000Forecasted 2024 home sales change: +18.0%Forecasted 2024 home price change: +3.3%Forecasted 2024 combined sales and price change: +21.3%

3. Rochester, New York

November 2023 median home price: $239,000Forecasted 2024 home sales change: +6.2%Forecasted 2024 home price change: +10.4%Forecasted 2024 combined sales and price change: +16.6%

4. San Diego

November 2023 median home price: $995,000Forecasted 2024 home sales change: +11.0%Forecasted 2024 home price change: +5.4%Forecasted 2024 combined sales and price change: +16.3%

5. Riverside, California

November 2023 median home price: $585,000Forecasted 2024 home sales change: +13.8%Forecasted 2024 home price change: +2.0%Forecasted 2024 combined sales and price change: +15.8%

6. Bakersfield, California

November 2023 median home price: $385,000Forecasted 2024 home sales change: +13.4%Forecasted 2024 home price change: +2.3%Forecasted 2024 combined sales and price change: +15.7%

7. Springfield, Massachusetts

November 2023 median home price: $350,000Forecasted 2024 home sales change: +10.5%Forecasted 2024 home price change: +4.2%Forecasted 2024 combined sales and price change: +14.7%

8. Worcester, Massachusetts

November 2023 median home price: $475,000Forecasted 2024 home sales change: +9.1%Forecasted 2024 home price change: +4.8%Forecasted 2024 combined sales and price change: +13.9%

9. Grand Rapids, Michigan

November 2023 median home price: $390,000Forecasted 2024 home sales change: +6.1%Forecasted 2024 home price change: +7.2%Forecasted 2024 combined sales and price change: +13.3%

10. Los Angeles

November 2023 median home price: $1,150,000Forecasted 2024 home sales change: +9.2%Forecasted 2024 home price change: +3.5%Forecasted 2024 combined sales and price change: +12.7%

 

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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