Earlier this year, I was frequently asked by clients, "Kathy, with interest rates so high right now, should I wait until next year to buy a house?"

Well, even if a thousand clients ask me the same question, I might have a thousand different answers. After all, every client's needs are different, their budgets vary, their preferences for property features differ, their family situations are unique, and they lean towards different areas. Therefore, there is no fixed standard answer—it has to be analyzed based on your specific situation.

However, today we won't delve into specific case analyses. Instead, let me share predictions from two real estate industry leaders about next year.

First, we have Jennifer Branchini, the president of the California Association of Realtors, who also actively works in the Bay Area real estate market. She predicts that 2024 will be a better year for both buyers and sellers because interest rates are expected to decrease. Lower borrowing costs will encourage buyers and sellers to re-enter the market, stimulating California's home sales next year.

However, this doesn't mean that home prices will decrease. The median home price in California was about $822,000 in 2022, expected to drop by 1.5% to around $810,000 in 2023. But in 2024, prices are projected to rise by 6.2%, reaching around $860,000. Especially in our highly competitive Bay Area with its ongoing housing shortage, the upward pressure on prices remains significant.

The second prediction comes from Jordan Levine, Senior Vice President and Chief Economist of the California Association of Realtors. He says that due to an expected economic slowdown in 2024, the Federal Reserve will start to ease monetary policy next year. The 30-year fixed mortgage rate will drop from the current 6.7% to around 6%, possibly reaching around 5% by the end of next year. He also mentions that buyers will have more financial flexibility, allowing them to purchase homes at higher prices, which could also increase housing demand and put further upward pressure on home prices.

So, to summarize, both experts predict that interest rates will drop next year, but not by much; and despite this small decrease, home prices will still rise. Now, I’d like to ask you—does this sound like good news to you?