Top 6 Real Estate Issues
By Jim Palmer Jr.

The last two years has seen an unusual lull in the real estate market.  Instead of a typical downswing in that graph, it appears to have fallen flat.  Some predicted a crash that never happened.  Statistics show that only a flattening of the upward trend occurred with a very slight decline in January of last year.  Since that slight dip, prices have only slightly begun to climb again.  Real estate brokers left the business in numbers we hadn’t seen since the crash of 2007 because sales have been so slow.

Listed below are some of the main influences that I believe will continue to affect the real estate market this year;

1) Even though inventories have increased in recent months, inventories of available listings are still lower than normal.  Buyers and sellers haven’t  seen  eye to eye concerning real estate prices, because buyers think the market is in their favor or that it will soon crash and sellers think the market still favors them.

2) Housing affordability continues to be an issue.  Recent statistics show that sales prices in our region have leveled out but are still high, and show that the median sales price is showing just a slight increase each month.  Rents continue to increase because of the ongoing shortage of units.  Construction starts has seen an increase in our market, while construction costs continue to rise.

3) Ongoing global turmoil like the conflicts in Ukraine and Gaza create general political anxiety for many people and could disrupt supply chains and create higher inflation.

4) Recent elections and other political uncertainty could create economic troubles at least in the short term.  Impacts of new tariffs could soon impact prices of groceries and housing.  Debates locally and in our State Capitol concerning rent caps and capital gains increases all could have economic impacts.

5) Interest rates remain elevated despite some recent drops, causing purchasers  (first time home buyers and even savvy investors)to remain cautious.  Many owners are hesitant to sell, and potential buyers are wary of high prices, even expecting a drop in the market that does not appear to be coming.

6) Local fires and national disasters caused an estimated $380 billion in losses in 2023 and continued into 2024.  Even though only about a third of that cost was covered by insurance, premiums are surging due to such losses, inflation and rising property values. These escalating expenses create a hardship for homeowners and buyers.