We are approaching the end of 2023 so its time for some predictions for the market in South Florida for 2024. These are for entertainment purposes. Please don't base your future on what I have to say about the future. I take most predictions and forecasts with a grain of salt. So please don't take mine too seriously. If I was any good at predicting the future I would be retired by now and spending my days on the golf course. I don't know anyone that has predicted our current market conditions. A year or two ago, would you have believed a prediction that included 8% interest rates, the fewest pending sales in recent history and yet the market would remained remarkably stable?
There is a lot of pessimism among consumers, but no panic. People still need a place to live and choices remain low and tough to afford. I know of people that have very strong opinions that values will continue to go up. I also know a lot of people that have very strong opinions that a bubble is about to burst. There is a third direction the market could go, however. It could just go sideways. That is my prediction for 2024. A flat market in terms of values and continued lower volume of sales. For the first half of 2024 at least. We are used to the market moving either up or down over the last 20 years. We forget that sometimes it just goes flat.
Both buyers and sellers are hoping and waiting for a drop in interest rates. The market is at the mercy of THE FED. The direction of the market is dependent on the direction of interest rates. I don't think THE FED is going to lower rates unless they have to. They might think they have to if the economy starts tanking. But look around you. People spending their money on everything else besides buying homes. The overall economy doesn't seem to be in danger in the short term.
There are areas of the country that are weaker than others. Some segments of housing are not as strong as others too. Condos, especially older condos, are starting to see weakness and that I think will continue in 2024. I have talked about this before.
Rents will stabilize and their run may be over. During the course of the past few years rents have really taken off. Eviction moratoriums had a lot to do with that, and they are over. Evictions are way up. There is a lot more rental inventory coming online as well. Look around and you will see that a lot of the housing being built today is new apartment buildings. In South Florida most of the new rental units are in the luxury category. The upper end of rental market could soften as a result. The lower end is safe.
Those are my predictions for 2024. I will only add that it is senseless to try and time the market. Make your housing decisions based on your own wants and needs and remember that real estate is a long term investment. What happens in 2024 will seem inconsequential in 2044. One final prediction. None of you will pay any attention to that last sentence.
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