2024 Real Estate Market Wrap-Up: Highlights, Trends, and What’s Ahead for 2025
As we kick off 2025, the U.S. real estate market has had another eventful year. From rising mortgage rates to record-setting luxury sales, the market has kept us on our toes. While some buyers and sellers have faced challenges, there have also been pockets of resilience and surprising growth. This week, we’re diving into what shaped the housing market this year and what we can expect as we head into 2025.
To keep things concise, I’ve summarized the key points and left out the specific numbers for our local market. Our detailed market report, filled with charts, data, and insights, is heading to mailboxes this month. If you’re not on our mailing list, let us know—we’d love to send you a copy!
2024: A Market of Contrasts
The real estate market in 2024 felt like it was pulling in two different directions. Higher mortgage rates slowed things down for many buyers, but at the same time, strong demand and limited inventory kept prices holding steady—or even climbing—in some areas.
High Rates, Low Inventory
Mortgage rates remained stubbornly high this year, averaging around 7%, which added thousands to annual housing costs. As a result, many buyers chose to step back and wait for rates to come down.
Inventory Squeeze: Many homeowners, sitting on historically low rates from previous years, decided to stay put instead of trading up. This kept the number of homes on the market frustratingly low, with active listings down about 20% compared to last year.
Despite these hurdles, home prices nationally still rose about 3% in 2024. The ongoing imbalance between supply and demand kept prices up, even as sales slowed in most places.
The Migration Continues
The great reshuffling of America continued this year, with people moving to states like Nevada, Texas, and Arizona. Lower taxes, warmer weather, and relatively affordable homes continued to attract buyers.
Remote Work’s Staying Power: While some companies brought employees back to the office, hybrid work still allowed many people to prioritize lifestyle over commute times. For these buyers, locations offering more space and sunshine were a big draw.
A Significant Shift to Renting
Build-to-rent communities gained momentum this year. These are residential neighborhoods designed specifically for rental purposes rather than for sale. Offering high-end rental homes in suburban neighborhoods, they became popular with people who wanted the perks of a house without the long-term commitment or sky-high mortgage payments.
Sustainable Living Gains Momentum
Sustainability became a bigger priority for buyers in 2024. Features like solar panels, smart home systems, and eco-friendly materials helped homes stand out, especially in states like California and Oregon, where green living is part of their lifestyle.
Strength of the Luxury Market
While the broader market faced hurdles, the luxury segment—driven largely by cash buyers—told a contrasting story. Homes priced over $1 million across the country continued to see strong demand, and in some cases, set new records.
This year, at least seven homes sold for over $100 million, up from five in 2023. Malibu led the way with a sale topping $200 million, marking a new California record.
Expanding Markets
Traditional luxury hotspots like New York and Los Angeles thrived, but we also saw more high-end sales in Aspen, Nashville, and here in Lake Tahoe, showing that luxury buyers are exploring new territory outside of big cities.
Locally, in 2024, our luxury market saw significant activity. In October, a property known as Old Forge, originally built by casino mogul Steve Wynn, sold for a record-breaking $62 million. This estate features a private beach, a deep-water pier, and a main house of approximately 12,700 square feet.
Additionally, in August, a 1.4-acre estate in Incline Village sold for $47.5 million. This property includes a 12,000-square-foot home with 150 feet of lake frontage, a boat lift, and a shared deep-water pier.
Both buyers were from the Bay Area, and both properties were on the Nevada side, highlighting the continued trend of Californians turning to our more favorable tax environment.
For these buyers, real estate remains a solid investment, especially during periods of economic uncertainty. They report that privacy, space, and premium amenities continue to drive their decisions.
Several big events had a direct impact on real estate this year:
What’s next for real estate? While no one can predict the future with certainty, here are a few trends that industry experts are predicting:
As we move into 2025, the luxury real estate market is poised for continued strength. Experts project growing demand for vacation and second homes in high-value markets like Lake Tahoe, driven by the desire for privacy, premium amenities, and tax benefits.
More luxury buyers are favoring newly constructed properties over taking on major renovations. In areas like Lake Tahoe, where land for new development is scarce, the focus is shifting toward properties that have already been renovated.
We are projected to have a strong year. With economic uncertainty still looming, real estate remains a favored asset class for wealth preservation and investment. For more specifics about our local market, be on the lookout for our upcoming year-end newsletter. Here’s to a prosperous and successful 2025!
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