Two HandsBy Ruth Kennedy Sudduth, Principal and Vice Chair of LandVest's Board of Directors, Director of LandVests Fiduciary and Family Office Consultancy
Economists are known for their two hands:
On one hand, wealth creation, demographics and underbuilding support the market.
On the other hand, overly ambitious pricing and more inventory are a drag.
Wonder about the mood for luxury buyers and sellers? Look at the stock market for the last month or two.
The recent rebound from April through the time of writing (early June), along with easing of mortgage rates helps. The mood is decent right now.
Longer term, New England remains an engine of wealth creation. Boston and Massachusetts consistently rank highly formillionaires,startup environment, andhousing prices.
LandVest President Joe Taggart does a great job looking at the secular factors influencing real estate inhis latest article on housing inventory.
TL;DR* for Joe's piece (but please do read it - his work is wonderfully clear and insightful):
This shortage of housing, combined with 80% of homeowners with mortgages at 5% or below (far below current levels), will limit mobility of homeowners, continuing to cause upward pressure on residential prices.
What about the commission lawsuits?TheNY Times coveragenotwithstanding, the proposed NAR settlement seems unlikely to reduce real estate prices, especially in the face of this kind of shortage. It will, however, cause changes in transaction practices (we can help you navigate).
Other factors may hit the real estate market a stock market decline, or a recession, or pick your black swan event. The underlying pressure for prices to go up will remain until we get through a wave of young homebuyers and a constrained supply.
On one hand, prices are still high. On the other hand, sellers need to be smart:
In his most recent article, LandVest Vice President and Managing Director of Real Estate Slater Anderson provides timelytracking of market sentimentthrough the eyes of our brokers.
The short answer: sentiment is balanced. Buyers are active and feeling more empowered, and sellers are shifting to be more willing to list and sell their properties.
Realistic pricing is a huge challenge, and there are far more price cuts than would have happened two years ago.Its not that pricing is falling, its that asking prices outpaced the market.
Across New England, we see a lot of sellers pushing their listing price and those properties are hanging on the market.This is not a ground-breaking market.
How to play your hand: Stay informed. If youre curious about more analytics on how rising wealth drives the luxury market, J.P. Morgan Private put out What you need to know before buying a luxury home.
TL;DR for J.P. Morgans piece:
We are here to help. If not us, we can connect you with great resources in our network.With a little luck, and the guidance of trusted advisors, well safely navigate the journey.
Ruth
*TL;DR = Too Long; Didn't Read.
The 2024 Outlook by LandVest
The 2024 Outlook by LandVest is a series of analyses and insights on the investment land and luxury residential markets. The Outlook is informed by performance in our land, residential, and fiduciary consulting business units. Read more from Joseph Taggart on housing inventory, or Slater Anderson on LandVest listings and broker sentiment.
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