It’s that time of year when the experts break out their crystal balls and start speculating about what the real estate market will do in 2024.

Is 2024 the year Frisco home prices come crashing down or should we expect to see continuing home price appreciation?

The forecasts are varied so continue reading below, or watch the following video, as I explore what might be in store for Frisco area home prices in 2024;

Feeling Anxious

Many potential buyers I have spoken to are feeling anxious about where the housing market is heading.

It’s understandable.

Home prices are at record-highs, mortgage rates have soared, and affordability has hot rock bottom. The latest reports from various sources offer differing perspectives, with some anticipating a drop in home prices in 2024 and others forecasting a modest gain.

Here are some of the latest forecasts:

The HPES (Home Price Expectation Survey) is the one I find most interesting. The Home Price Expectation Survey from Pulseomics, is a survey of over 100 leading economists and real estate experts averaged together.

While these forecasts are interesting, they aren’t always accurate.

We only have to go back a year to December 2022. You might recall the headlines and doomsday predictions of a housing market crash happening in 2023 with price declines of up to 20%.

That obviously didn’t happen.

How Did We Get Here

Although it often seems like it, the housing market we find ourselves in today didn’t appear overnight.

The housing market in the early 2000s was humming. Demand was insatiable, partly fueled by exotic mortgage programs.

The ultimate bubble was created.

In order to satisfy demand the new home builders ramped up construction.

As we know, eventually the bubble burst and the market came crashing down. The collapse of the mortgage industry was the first domino that led to the collapse of the housing market.

The vast majority of people that lost homes are the people that never should have qualified to buy them in the first place. I know, I was one of them! I bought way more homes than I ever should and got caught holding the bag on a couple of them.

Supply was high, demand disappeared, and prices came crashing down.

Fast Forward to Today

Contrast that with recent times. Despite fears of a housing catastrophe during the pandemic, the opposite happened. Remote work, low mortgage rates, and government incentives created a buying frenzy. Demand skyrocketed while supply lagged, propelling prices to dizzying heights.

The difference is the demand was real and people actually had to qualify to get approved for a mortgage. The problem is we didn’t have the supply to satisfy the demand.

The homebuilders got hurt during the mid 200os market crash and the number of new homes being built over the past 15 years has never reached the level that were being built in the early 2000s. We didn’t get back to the historical average of 1 million new homes built until 2021.

Even though demand, and sales, dropped substantially when mortgage rates rose in 2022, we were never over supplied so the relationship between supply and demand was never such to cause the market to crash.

Did prices go down? Yes.

How much they declined depends on where you live.

Here in Frisco, and the surrounding areas, we saw steeper price declines in the second half of 2022 than many areas of the country due to the amount of new construction supply we had in our local market.

What Does That Mean for Frisco in 2024?

As we saw with the forecasts a year ago, predicting what the housing market will look like a year from now is like reading tea leaves, but based on the current data we do have a really good idea about what the first quarter looks like.

For the past couple of months, the final sales price of homes here in Frisco has been within 3% to 4% of the original list price. Additionally, the price of new listings has also remained steady for the past few weeks as shown on the following graph from my weekly market report;

The dashed line shows the change in median list price weekly, and although more volatile, you can see at the far right hand side of the graph that is has been relatively flat. The current median list in Frisco is $719,000.

We know that homes are selling within 3% to 4% of original list price and are taking approximately 60 days to go under contract currently.

Based on these factors we can expect the homes currently on the market to go under contract by mid -February and, assuming a 30 day closing, will close in mid-March with a median sales price between $690,000 and $700,000, which is right where the median sales price was in March 2023.

Check out my Frisco Market Report to see all of the data and a breakdown of these numbers by price range.

Mortgage Rates are the Wildcard

As mentioned above, the main reason home prices have remained stable in this area is because supply has been in balance with demand due to the amount of new construction in the area. The new home builders were able to keep sales moving by offering financing incentives.

Over the past could of weeks mortgage rates have fallen to their lowest level since earlier in the year and that is expected to continue into 2024.

Assuming mortgage rates do continue their downward trend, buyers that put their plans on hold due to rising costs are likely to start returning to the market. Mortgage lenders are already reporting an increase in new mortgage applications.

What happens to home prices beyond the 1st quarter of 2024 depends on what happens with supply in our local market.

Will mortgage rates drop enough to encourage homeowners to list their homes for sale and give-up their ultra-low mortgage rate?

If yes, I would expect pricing to remain relatively flat or edge up moderately. If no, expect home prices to appreciate faster as increased demand will once again put upward pressure on home prices.

Bottom Line

There is no way to know for sure exactly what will happen with home prices in 2024. I can safely say that if you are holding out thinking a market correction is coming you may find yourself waiting for quite some time.

That doesn’t mean now is the right time for everyone to make a move. If you have been thinking about buying or selling a home I invite you to Schedule a Call and let’s talk about it. Everyone’s situation is different and I would welcome the opportunity to discuss your goals and provide you with the information you need to make the decision that’s best for you and your family.

See the Newest Frisco and Prosper Homes For Sale


Want to Stay up to Date on the Latest Market News?

Become Part on my Weekly Email Community