2024 Palos Verdes Market Forecast
- Real estate prices are expected to rise 2-4% but huge gains are unlikely due to challenges with housing affordability to all but the very top end of the market
- Sales volume is expected to continue to remain below normal levels, but improve compared to 2023
- Owners looking to “right-size” will continue to seek one level homes
- Millennial demand is not going away. Many of these buyers are receiving down payment help from family
- Areas of Opportunity: The east side of PV, entry level condos & townhouses, and cosmetic fixers due to improved contractor availability and lower material costs
- Rents should remain stable with limited inventory and renters staying in place longer
What can we expect for real estate in 2024?
There is some consensus among economists that the worst is behind us in terms of real estate sales. While values mostly held steady in 2023, small gains in the ballpark of 2-4% are expected in 2024. Continued limited supply should help keep upward pressure on prices and reduce the likelihood of a correction in our market. According to Odeta Kushi, deputy chief economist at First American, “we expect existing-home sales to pick up in the coming months as mortgage rates moderate…. so it does seem right now that the worst is behind us and that the housing market has already had its recession and is now heading into recovery mode.”
As we saw throughout 2023, great properties will continue to sell quickly, many with multiple offers. Low inventory and a reasonably strong economy will lead to stability in housing prices. In general, Palos Verdes is a luxury property market, attracting wealthy buyers in search of their dream homes. These discerning buyers are ready to seize the opportunity as soon as it arises, regardless of external market factors. However, the combination of low inventory as well as challenges to housing affordability means some buyers, especially those at the entry levels, will likely continue to sit on the sidelines until one of several things happen – prices drop, inventory improves, or mortgage rates drop into the 5% range.
Overall, the real estate market remains fundamentally sound. The market is under supplied and should mortgage rates drop significantly later in the year, buyers and sellers that have been waiting to move will return to the market. More buyers means higher prices, and the growth cycle will begin again. Our market rating for the start of 2023 is a neutral market, meaning neither sellers nor buyers have a distinct advantage in the market. If you have any questions about the Palos Verdes real estate market or want to know the value of your property, please reach out and I am happy to help.
