A Look Back at the 2024 Market & Ahead to 2025

Change is Hard

The phrase I repeated the most last year was “Transitions are hard!” 2024 was a transitional year. We started shifting out of a hot seller’s market into a cooler seller’s market and by fall of last year we saw a true balanced market for the first time since 2015. That change was hard felt. Many sellers (and brokers) had anxiety when their home did not sell in six days. The cadence of the market is unfamiliar. Average market time in 2024 was 37 days.  At the same time, buyers incorrectly assumed we were now in a strong buyer’s market and their strategy for buying fell flat. Transitions are hard. We spent last year adapting and navigating that shift. 

Interest Rates & the New Administration

Interest rates and the new administration continue to be hot topics. Last year everyone was optimistic that rates were going to really drop. Buyers were waiting to see 5%, but now most have come to the conclusion that 6-ish% will be the norm for 2025. We expect to see some interest rate volatility, but it will be within that 6% range. The wild card, of course, is the new presidential administration. Tariffs and stock market shifts could put the Fed onto a new path. And we, of course, have seen the unexpected before. 

Island Home Prices

At year’s end, we saw the number of homes sold on the island go UP for the first time in three years (333 homes sold in 2024 versus 270 in 2023). Seventeen of those sales were in the much-anticipated Wintergreen Affordable Housing Complex. However, island average prices went down 3%. The Wintergreen Townhomes had an average sales price of $390,000, which contributed to our average pricing shifting down. Although not a huge drop, this is the first time we have seen a decrease in pricing since 2013. The average sales price is now $1,629,000.Cooling pricing is expected as we move towards a more balanced market.

What Will the Market Look Like in 2025?

Today, in mid-January, there are 35 listing on the market. Last year we had 25 and the year before that 15. With more stable rates and more inventory, we expect to see more of a balanced market/cool seller’s market as the season unfolds. And now, we should all be a little more adjusted to that concept. A positive element of balanced times is that it is more feasible to make a move WITHIN a market. Meaning sell and then buy or vice versa. The hot seller’s market posed several challenges for those looking to move-up or downsize. This year, I predict we will see more intra-island moves and the overall number of homes sold on the island is predicted to increase by as much as 10%. As far as pricing, I predict we will see a modest uptick in pricing in the 3-5% range. Interest rates around 6% will continue to keep many wed to their 3% rate/home. More buyers WILL re-enter/enter the market, meaning that even though we are predicted to have more inventory, it is unlikely to be enough. 

What is My Home Worth?

Now that we are on the other side of multiple years of double-digit pricing surges, you might be wondering what your home is worth. In our small, niche market, Zillow and Redfin are not great at producing an accurate number. If you are curious, give me a ring. And if you are considering buying and/or selling in 2025, I’d love to discuss my strategies to help you make an expertly timed intra-island move or embark on an off-island adventure. Last year I helped 10 buyers and 18 sellers in our market. Twelve of those clients were repeat clients, some of whom I have worked with for over a decade. It’s an honor for me to continue to be a part of your real estate story.