In 2024, Zillow economists predict home buyers will have more options and a bit more affordability breathing room — but only a bit — after the inventory crunch and mortgage rates rising to 20-year highs were this year’s headline news items.
Buying a home will remain expensive, keeping pressure on the rental market to cater to families that will be renting longer than previous generations typically were. Many of those who do buy will turn to homes that need some work, and do-it-yourself upgrades and repairs will keep new homeowners busy.
Here are Zillow’s predictions for the housing market in 2024:
More homes will hit the market as homeowners accept that mortgage rates aren’t falling any time soon
“Higher for longer” is the key refrain regarding mortgage rates looking ahead to the next year in housing. It’s becoming clear that high mortgage rates have some staying power. Expect more homeowners who locked in long-term payments when rates were near all-time lows to list their homes for sale, as they grow weary of waiting for the historically low rates of 2021 to return.
A stubbornly small pool of homes for sale has kept competition fairly high for most of this year, even with high costs limiting the number of active buyers. With mortgage rates rising over the past two years, homeowners have been reluctant to sell, opting instead to hold onto the ultralow interest rate on their current mortgage. Many of those homeowners will have their eye on a home with a bigger (or no) backyard, an extra (or fewer) bedroom, or in their preferred neighborhood across town, and Zillow predicts more of these homeowners will end their holdout for lower rates and go ahead with those moves.
More homes on the market — even the gradual increase Zillow economists expect — would be good news for home buyers, spreading demand and easing upward pressure on prices.
Home buying costs will level off, giving hopeful buyers a chance to catch up
A typical home buyer in October would have spent more than 40% of their earnings on their mortgage payment — an all-time high in Zillow data, which stretches back to the 1990s. While affordability will undoubtedly remain the top concern for potential home buyers in 2024, there is reason to expect those challenges to ease just a bit.
Zillow’s latest forecast calls for home values to hold steady in 2024, falling 0.2%. Predicting how mortgage rates will move is a nearly impossible task, but recent inflation news gives the impression that rates are likely to hold fairly steady as well in the coming months. Taken together, the cost of buying a home looks to be on track to level off next year, with the possibility of costs falling if mortgage rates do.
That would give time for wages and buyers’ savings to catch back up — welcome news after the rapid rise in housing costs over the past two years. Wage growth has held strong, meaning the share of income spent on a mortgage will fall next year even if costs remain the same.
The new starter home will be a single-family rental
Though some improvement for home buying affordability is expected in 2024, many households will continue to be priced out. Demand — and prices — for single-family rentals will continue to increase next year as families look for a more affordable option to enjoy amenities like a private backyard or a home that doesn’t share walls with neighbors.
One possible path to more single-family rental inventory is homeowners deciding to turn their home into an investment property and rent it out rather than selling it when they move. The ultralow mortgage rates held by many existing homeowners make it more likely that this option would pencil out.
More markets will follow New York City’s lead with rental demand surging near downtowns
Throughout much of the pandemic, and even before, suburban rent prices were growing faster than rents in urban neighborhoods. [1] While the gap has narrowed, suburban rents continue to outpace urban rents in most major markets, specifically, 33 of the 50 largest metro areas. [2]
In New York City, data from StreetEasy, Zillow Group’s New York City real estate marketplace, shows demand is surging for rentals in commutable areas with easy access to Downtown or Midtown Manhattan, while areas farther from these office-laden neighborhoods are seeing relatively less demand. StreetEasy experts predict a strong year for Manhattan demand in 2024, and Zillow foresees more markets following suit, with rental demand surging near downtown centers.
Renters looking for a place near downtown will likely have more options with this year’s multi-family-construction boom, which means a huge number of new homes have hit the market. More options for renters looking for a new place means landlords who are trying to attract tenants have more reason to compete with each other on price. That’s a key reason more rental listings are offering concessions.
Traditional home buyers will compete with home flippers for homes that need a little TLC
Typically the target of home flippers, homes that need a little work before they qualify for “dream home” status will have increased interest from buyers shopping for their primary residence.
Inventory has been far below normal for a while, and though Zillow predicts more homes will hit the market in 2024, inventory will remain much lower than pre-pandemic norms. Faced with limited choices, buyers will be willing to overlook small flaws, such as an outdated bathroom or kitchen.
The higher cost of buying a home today makes a flip harder to pencil out, so buyers may face less competition from flippers than they might have in previous years. Even with less chance of being subject to a bidding war, these homes won’t come cheap, so expect buyers to frequent their local hardware stores as they work on DIY home improvements. If Zillow’s 2024 home trends to watch are any indication, expect brutalist-inspired features and sensory gardens to be on home improvement to-do lists, but not “cloffices” or Tuscan kitchen designs.
Artificial intelligence will enhance the home search experience
Generative AI made waves this year, and Zillow expects AI advancements to streamline the home-shopping and home-selling journey in 2024, improving the experience of buyers, sellers and their agents.
Zillow tech experts expect a variety of new tools and technologies designed for real estate agents next year, allowing them more time to connect with more clients and prioritize face-to-face interactions. Agents have been using AI to assist with writing listing descriptions and to create 3D content for their listings. Next year’s advancements are expected to have an emphasis on visual and multimodal capabilities, including more rich media content.
Expect home shoppers to benefit from generative-AI-powered experiences to glean valuable insights and guidance on home financing.
[1] According to Zillow Observed Rent Index data at the ZIP code level. ZIP codes were classified as urban, suburban or rural, and month-over-month and year-over-year changes were then aggregated nationally and across metro areas for each classification; those changes were then averaged.
[2] Year-over-year changes, as of October 2023.
Let’s look at the graphs that were updated with November’s data today:
About 50,000 people live in Carmel Valley, 92130, and only seven houses sold there last month?
The pricing is holding up for the few who do sell:
The wildest frenzy period was from Spring, 2021 to Summer, 2022 when the median DOM was really low for a year. Higher rates shook up this measurement, but it has since settled down in 2023:
This looks solid too – under 2 months is healthy:
The 92037 is La Jolla, which is higher-priced, but look at how similar the median sales price is around Carlsbad, Encinitas, and Carmel Valley now (graphs are interactive):
We are going through this now in our family, and it’s probably happening to you or someone you know. It’s a reminder that if you’re a senior and have one move left, it’s so much better to move sooner, rather than later (trying to put a real estate spin on this touching video).
The market is so much different now than it used to be that we should jettison all previous assumptions (paraphrased from a Rob Dawg comment years ago).
In the old days, prices would be coming down by now because the demand would have been severely impacted by higher prices and rates – but not today:
Is it just early? Maybe, but are sellers going to dump on price when there’s always next year? With virtually no foreclosures and unemployment, there aren’t the usual pressures on sellers, and most will wait it out, rather than lower their price in a panic.
The real impact will be on the number of sales. We’ve already experienced – and survived – around 100 sales per month in the off season, and if that happened every month of the year, we’d find a way to live with that too.
Sellers need to choose – do more to spruce up the house for sale, or be willing to take less. If the house is already dated and needing a full renovation, the discount will probably be getting larger, because buyers are putting up a fight.
Here are examples of the November discounts – only one sold over list:
The median sales price could levitate, or even rise, while more discounts off the aspirational list prices keep happening!
While a surge in inventory next year would help to change the market dynamics, there isn’t any hard evidence of it happening yet:
How many would be considered a surge? If the number of new listings rose 10% or even 20%, would anyone notice? Probably not.
Using these November numbers, and adding an extra 20% would only get us back to last year’s total – which we thought was bleak then. but now I’d take it!
It would take a real bump to get buyers to step back and say, ‘hold on, I’m going to wait and see where this goes for a month or two’.
Let’s guess that it would take at least a 25% increase in new listings for buyers to pause.
I was asking around yesterday, but nobody had anything definite to report about their new-listings flow for next year. One agent thought that we’re going to see a lot of short sales though (???).
In 2024, you will be able to buy a million-dollar home in San Diego County with 3% down.
Thank you taxpayers!
What will it take to qualify for a $1,006,250 loan? The P&I payment at 7% is $6,695, and by the time you add PMI, property taxes, insurance, and HOA, the total payment will be around $8,733 per month.
It would take an annual income of $325,000 to qualify with only a car payment or two, and no other debts.
Hopefully those earning $325,000 have more than 3% to contribute to the down payment. But if not, it’s ok if you want to opt for the max mortgage interest write-off instead. What a great country!
Michele and I cruise around twice a week looking at the new listings.
I love it because I get to pontificate about the business and give her guidance like a good broker should.
She asks many great questions, and today was no exception. She had read the blog post from 2009 where I said agents should know the hot buys. She asked about the definition of a hot buy.
Today there is an easy formula to identify a hot buy:
If the number of Zillow Saves is 5% or more of the Zillow Views, it is a hot buy.
If the Zillow Saves are 7% to 10% of the Zillow Views, grab your checkbook – because it is sizzling hot.
Of course, now that I’ve divulged my tip, a few agents will manipulate the counts so if the listing agent is a known scumbag, then don’t trust their counts. You know who the scumbags are, don’t you?
We came up with another idea too.
If the house is one-story, newer, and the price is attractive, it’s a hot buy. But then we went one better.
If the house has two of the three (one-story, newer, attractive price), it’s probably a hot buy anyway.
If the list price is attractive, that is enough to power any sale, but if the price is attractive and the house is either one-story or newer it will probably be a hot buy. In 2024, a newer one-story house doesn’t even need to have an attractive price – there are so few of them that they can ask anything they want.
We saw three houses for sale today that will demonstrate my theorem. All are one-story homes that have been improved and should appeal to the maximum number of buyers – especially the seniors who have the money and will only consider a renovated one-story in a good location with some view:
For those who desire a full ocean view from both the family room AND the primary suite and can live with 1,620sf built in 1986 on a smaller lot in Carmel Valley, you can’t do much better than this for $2M:
If you want a fully-renovated one-story house just east of the freeway in Solana Beach that overlooks the golf course, then this would be worth a look:
Want to step it up and buy a brand-new 4,194sf one-story house with ADU in a prime Del Mar location with ocean view – and price is no object? Then this is for you, priced at $16,995,000:
Why would these three list for sale now instead of waiting until next year? Well, I can’t help you with that. It is the most lucrative time ever for buyers to pause during the absolute peak wait-and-see period of all-time.
So if 1-2 of these go pending by the end of the year, it will show that the premium properties are always hot – and I wouldn’t be surprised if they all sell.
He doesn’t mention that we don’t get paid up front, we don’t get paid along the way, and we only get paid if we successfully close the sale – which in this day and age is harder than ever.
This sold for $5,810,000 on April 28th of last year, which was the last peak of the market- mortgage rates were around 5% then and have risen to just under 8% today. It didn’t stop or slow down a buyer from paying a whopping $6,300,000 cash for it today:
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We sold a home with Jim and Donna and from beginning to end they were consummate professionals. Their initial walk through the property resulted in a list of items to be repaired or updated. They supplied a list of vendors and job quotes to do the repairs and updates. We originally wanted to sell ‘as is’ and just get it over with. They gave us a selling price for ‘as is’ and options for doing a few updates/repairs to doing it all with the selling price for each option. We agreed to do all they suggested and we sold for the exact price they predicted. For every dollar spent we got back more than $2 back in the selling price. And they got that price in a rising interest rate environment! Donna and Jim are extremely detailed and guide you through ever aspect of the sale. There were no surprises thanks to their guidance. We couldn’t be more pleased with their representation.
Thank you Donna and Jim,
Jerry and Mary
Heather Quejada
March 27, 2025
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We have known Jim & Donna Klinge for over a dozen years, having met them in Carlsbad where our children went to the same school. As long time North County residents, it was a no- brainer for us to have the Klinges be our eyes and ears for San Diego real estate in general and North County in particular. As my military career caused our family to move all over the country and overseas to Asia, Europe and the Pacific, we trusted Jim and Donna to help keep our house in Carlsbad rented with reliable and respectful tenants for over 10 years.
Naturally, when the time came to sell our beloved Carlsbad home to pursue a rural lifestyle in retirement out of California, we could think of no better team to represent us than Jim and Donna. They immediately went to work to update our house built in 2004 to current-day standards and trends — in 2 short months they transformed it into a literal modern-day masterpiece. We trusted their judgement implicitly and followed 100% of their recommended changes. When our house finally came on the market, there was a blizzard of serious interest, we had multiple offers by the third day and it sold in just 5 days after a frenzied bidding war for 20% above our asking price! The investment we made in upgrades recommended by Jim and Donna yielded a 4-fold return, in the process setting a new high water mark for a house sold in our community.
In our view, there are no better real estate professionals in all of San Diego than Jim and Donna Klinge. Buying or selling, you must run and beg Jim and Donna Klinge to represent you! Our family will never forget Jim, Donna, and their whole team at Compass — we are forever grateful to them.
Lou F
March 27, 2025
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WeI had the pleasure of working with Klinge Realty Group to sell our home in Carmel Valley, and I cannot recommend them highly enough!
Jim and Donna demonstrated exceptional professionalism, offering expert guidance on market conditions and pricing strategy, which resulted in a quick and successful sale.
Communication was prompt and we were well-informed throughout the entire process.
For anyone looking for a dedicated and knowledgeable real estate team, look no further!
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William Sams
March 25, 2025
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Donna and Jim Klinge of Klinge Realty Group have our highest possible recommendation. From Donna and Jim’s first visit to our house through closing their advice and counsel was candid and honest in all dealings. They kept us fully informed throughout the process. The house sold less than three days after listing with a two-week closing. My wife and I have sold several houses during our lives. This was by far the best experience. Klinge Reality is a premium service realtor. You can’t make a better choice for someone to sell your home fast and for top dollar.
Emily Hernandez
December 29, 2024
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Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.
Jesus Adrian Sahagun
November 11, 2024
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This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.
SABIHA PASHA
July 23, 2024
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Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless.
So grateful that I had them on my side!
Anu Koberg
July 13, 2024
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We first found Jim through his blog at bubbleinfo.com, which really showcased his knowledge of SoCal real estate. Since then we've done three transactions with Jim and Donna, and they are an incredible full service agency, with Jim's deep market insight and Donna's deft contract and project management. We trust them implicitly in their analysis and strategy, which is based on years of experience. They're always available and on top of things, and we strongly recommend them to anyone.
Bjorn Isachsen
July 10, 2024
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The Good
The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market.
The Great
Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them.
The Outstanding
We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time.
The Truly Exceptional
Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs.
The Recommendation
For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's bubbleinfo.com blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...
Chris Shea
June 21, 2024
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We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready.
Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free.
Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.
