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East Aurora Advertiser Column: Morgans Market Musings: The Crystal Ball – Five Bold Predictions for 2024

Bob Morgan January 15, 2024

 
As we welcome 2024, I thought I would start a new tradition. I will make a handful of bold predictions for the coming year, and you, our gentle readers, will get to delight in my folly when I review how I did at year’s end. So, my life as a modern-day Nostradamus begins, and we can see how I fared in December.
 
  • Bold prediction #1 – Mortgage rates will settle around 5 percent. Paying off my column from last month about the impact of mortgage rates on our local market, I predict that rates in 2024 will gradually decline and end the year below six percent. The Fed has signaled that it anticipates three overnight rate reductions for 2024, inflation is slowing and rates have been on a slow but steady decline.
  • Bold prediction #2 – Inventory levels will increase. In 2024, I expect that our local inventory of available homes for sale will exceed the levels of 2023, but not recover to the levels of 2022. This prediction is in part because of declining interest rates, but also because there are simply so many people who have been delaying their next move, and they will be tired of waiting. Historically, when markets encounter relatively higher interest rates, over time, consumers begin to accept these higher costs as the new normal and will get on with their lives and plans. After all, plenty of Americans bought and sold homes in the 1980s when interest rates hovered in the mid-teens. I expect these factors will begin to unstick the 2023 logjam.
  • Bold prediction #3 – Home prices will increase. Even though inventory levels will increase, I expect prices will also continue to increase. I know that this runs contrary to the economic laws of supply and demand. My prediction is based on the fact that there remains pent-up demand for quality housing inventory. In 2024 I expect that the median price for homes in East Aurora and the surrounding areas will continue to climb, and good, market-ready homes will continue to sell quickly, often with multiple competing offers.
  • Bold prediction #4 – The National Association of REALTORS®, and many of the largest New York real estate brokerages, will be named as defendants in a New York-based class action price fixing lawsuit. This is a topic that I intend to address in some depth in a future column. If you’ve been following recent news in the real estate industry, you will know that there was a class action lawsuit in Missouri where a jury awarded 1.78 billion dollars to plaintiffs who alleged a conspiracy between the National Association of REALTORS®(NAR) and many top, large brokerages to artificially inflate commissions of home sales. With Treble damages, this verdict could cost NAR and the defendant brokerages more than $5 billion. It is likely that the repercussions from this verdict, as well as a renewed inquiry from the Department of Justice, will dramatically alter the future of the real estate industry. In the meantime, copycat litigation is popping up in multiple states, and I expect that New York will not be spared.
  • Bold prediction #5 – The next President of the United States will be younger than 78 years old. This is a little off the real estate path, but we are heading into an election year, and Federal policy affects markets, so please indulge my wishful prediction for our nation. According to data from the Centers for Disease Control and Prevention, the average life expectancy for American males in 2021 was about 73. Of our current major party front runners, we have an octogenarian candidate, who at 81 years old has a propensity for bike accidents and falls on stairs, and faces an open impeachment inquiry in the House. In the other corner is a twice impeached candidate who will be 78 years old on Election Day, is obese and has a refined culinary palate that tilts heavily toward McDonalds. He also faces 91 criminal felony indictments. Either candidate would be the oldest President-elect in the history of our nation. It seems that actuarially and judicially there’s at least a chance for this prediction to come true.
Here is to wishing you all a very happy, healthy and prosperous 2024. I look forward to revisiting the accuracy of my crystal ball with you in the future!

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