Market Update December 2024
Westlake Village, Agoura Hills, Oak Park, Thousand Oaks and Newbury Park
By: Michael Rice | December 1, 2024
My View From Inside
It’s December which means it’s time to forecast what’s in store for the real estate market in 2025.
2024 – The transitional year
The California real estate market forecasters had a much better showing this year. Many of the predictions going into 2024 turned out to be fairly accurate.
2024 appears to be the last year of the Covid market hangover. The interest rate shock that crippled the housing market for a couple years is now moving in the right direction as rates slowly but surely head downward. The market is accepting that 6% mortgage rates are the new normal for the time being.
2025 is expected to continue the momentum of 2024 with more homes becoming available, luring home buyers back to the market.
How’d We Do and Where Are We Headed?
The Overall Economy
- 2024 Forecast: The U.S. economy was forecast to grow 0.7% in 2024 as economists were confident we avoided a recession.
- Reality: GDP is expected to end the year up 1.9% – more than double the forecast.
2025 Forecast: The latest post-election U.S. GDP forecast is a +2% increase in both 2025 and 2026. And inflation is expected to drop from 2.9% in 2024 to 2% in 2025 – favorable conditions for more rate cuts in 2025.
Mortgage Rates
- 2024 Forecast: Mortgage rates have proven to be the hardest thing to predict over the last couple of years. However, the experts got it pretty close this year. The forecast going into 2024 was for mortgage rates to average 6.8%.
- Reality: In 2024, U.S. mortgage rates peaked in May, with the 30-year fixed rate mortgage averaging 7.22% but ended the year at 6.6%, more in line with the forecast.
2025 Forecast: Once again, the forecast is for mortgage rates to continue downward. The California Association of Realtors (C.A.R.) is forecasting rates to drop to 5.9% in 2025. Mortgage rates are expected to bounce between the high 5s and low 6s for the foreseeable future.
California Home Prices
- 2024 Forecast: C.A.R. expected home prices to increase 6.2% in 2024 to $860k.
- Reality: California home prices ended the year with a median price of $869k up 6.8% – pretty close to the forecast.
2025 Forecast: C.A.R. forecasts home prices to increase 4.6% in 2025 to $909k.
Sales Volume in California (number of homes sold):
- 2024 Forecast: C.A.R. forecasted that 23% more homes would sell in 2024.
- Reality: The number of home sales in CA were up only 6.8% to 275k homes sold. That’s a 38% drop in sales compared to the 444k homes that sold in the peak of 2021.
2025 Forecast: C.A.R. expects home sales to increase 10.5% in 2025 as more buyers accept the new “normal” 6% mortgage rates rather than waiting for a substantial change.
Bottom Line…
The inventory of available homes continues to recover from historic lows giving buyers more options heading into the new year. 2025 is expected to be a continuation of the trends of 2024: More homes selling for a higher price and with lower mortgage rates.
Ready to talk? Feel free to reach out (818) 384-9929 | Michael@ConejoValleyGuy.com
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What to expect moving forward
- Expect homes that have been sitting on the market for 30 days or more to take a lower offer as sellers start to get nervous.
- Expect mortgage rates to hover around 6.3% the rest of the year.
- Homes in popular neighborhoods are still selling fast. Be prepared to act quickly. If you like it, someone else probably does too.
- If you have your eye on 2025, start to prepare now. Next year may be competitive as pent up demand grows.
Seller’s Corner
The uptick in competition from other homes for sale is shifting the market away a bit from sellers. It’s definitely not the seller’s market of years past. It’s critically important to price your home correctly from the beginning. Buyers are eagerly waiting to pounce on the popular homes. If you miss that first window to attract a buyer, you may have a tough time getting them to come back again once you inevitably drop the price.
What's The 2025 California Forecast?
According to the California Association of REALTORS
- The median price of a home is expected to increase 4.6% in 2025.
- The number of home sales is expected to increase 10.5%.
- Interest rates are expected to average 5.9% in 2025.
Market Snapshot
Prices
- The median price of a Conejo Valley home was up in November to $1,100,000.
- That’s 12 consecutive months up year over year.
- Prices are up 17.3% from $938,000 last November.
- And down $39,000 from last month.
For Sale
- November ended with 297 homes for sale.
- Up 7.2% from last November.
- That’s 20 more homes than last year.
- And 69 fewer homes than last month.
Days on Market
- It took 32 days on average to sell a home in November.
- Up 23.1% from last November.
- That’s 6 more days than last year.
- And 6 fewer days than last month.
