Real Estate Review 2023: A Year of Challenges and Opportunities & 2024 Expectation

In the dynamic world of real estate, 2023 brought forth a mix of triumphs and challenges. As we bid farewell to the past year, let's delve into the pros and cons that shaped the Rockingham and Strafford counties' real estate market.

Pros for 2023:

  1. Surge in New Construction: In 2023, the region witnessed a notable increase in new construction, with 1,067 new houses accounting for around 20% of total listings. This marks a 20% rise from the 838 new properties in 2022. If you're in the market for a newly built home, this surge presents a golden opportunity.

  2. Closed New Constructions: In 2023 we saw 426 new construction houses and condos successfully closed, making up approximately 9% of the total closed properties in Rockingham and Strafford counties. While this percentage is slightly lower than in 2022, it still highlights a significant market for new builds.

  3. Median Price Growth: Median prices for Rockingham and Strafford counties rose to $525,000 in 2023, a noticeable increase from $494,000 in 2022. This growth suggests a positive trend in property values in the region.

  4. Lower Interest Rates in Q4: Monitoring the market closely, we observed a decline in interest rates during the last quarter of 2023, reaching as low as 6.8%. This favorable development potentially benefits prospective homebuyers.

Cons for 2023:

  1. Interest Rate Peaks at 8%: One of the significant challenges of 2023 was the peak interest rate, reaching 8%. This surge in interest rates posed a hurdle, affecting buyer affordability and leading to less accessible housing options.

  2. Less Affordable Housing: The confluence of high-interest rates, a 20% down payment requirement, and monthly mortgage payments, coupled with elevated property prices, resulted in less affordability for buyers in the real estate market.

Recap of Recent Years:

  • In 2021, interest rates hit a historic low, reaching almost 2%.
  • 2022 witnessed a doubling of interest rates in just six months.
  • In 2023, market corrections took place, and interest rates declined in the last quarter.

Expectations for 2024:

  1. Lower Interest Rates: Forecasts for 2024 indicate a reduction in interest rates, expected to be lowered three times throughout the year. This could potentially bring the interest rate down to 5.5%, making housing more affordable for buyers.

  2. Changes in Buyer Commission: Anticipate shifts in buyer commissions, particularly affecting those with VA, FHA loans, and first-time homebuyers. These changes might impact affordability for these specific buyer demographics.

Conclusion: As we step into 2024, the real estate landscape appears poised for positive changes. With expectations of lower interest rates and potential shifts in buyer commissions, the market is adapting to create new opportunities for both buyers and sellers. Stay tuned for a year of evolution and growth in Rockingham and Strafford counties.

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