Real Estate Market Predictions 2024–2031
There is no book that can teach about the next 7 years.
“You should read this book so you can see what happened the last time the market was like this…” no longer applies to this day and time. In the history of America, we have never seen interest rates rise nearly 3-times in a 24 month window.
2024 — A year full of chaos, denial, tightened access to capital, widening spread between seller ask and buyer offer. Rates may have a little correction down .30%-.75% but could also see rates rebound and be up .50%-.75%.
Election year, depending on who wins, the market is going to have a knee jerk reaction, either major sell off or major bull run. If the bull run happens, a major sell off will occur, and if a major sell off happens, a bull run will follow shortly after.
2025 — A YEAR OF LEVELING UP. Billions of dollars of commercial real estate debt will be due, dating back to covid 2020 year, who took out 5 year debt terms. With rates having been at 3.25–4%, now surging to 6.5–7.5%, debts will be matured and most likely unable to be refinanced. Defaults and work outs will be the first attempt and then eventually NPL (non performing loan sales) Will hit main street to find the highest bidder. Homes however will still be slowly leaking into the market and supply and demand will still be in the sellers favor, due to the overwhelming amount of buyers and high end renters looking to buy their “starter home” or upgrade to a new property for schools, location, etc. Rates are projected to be somewhere in the 5–6% range for 30 year fixed rate mortgage loans, maybe dipping as low as 4.5%. Cash out refinancing for residential properties will be the hottest topic as home owners look to take advantage of locked up pent up equity and consolidate debts and make alternative investments.
2026 — Another repeat debt due year, but this time two for the money with compounded defaults, bankrupt businesses and vacant ghost town like commercial real estate. Banks will tighten up like no one has ever seen, and that is if they even make it. Regardless of where rates are, all of these assets will be severely underperforming, which is why every bank today 11/20/2023 is raising capital and competing on the street for deposits. Deposits are the only thing that they think can help them stay afloat. The government can’t allow another “local community bank collapse” or there will be a run on the banks and the only way to access capital will be to go to private hard money and bridge lenders, or balance sheet REITS, Funds, and maybe JPMorgan Chase, but even they will be restricted and you better have a lot of money with them. No one is safe in 2026. Opportunity wise this will be the best time to start a bank as you have no legacy issues, no bad loans, no over leveraged portfolio. Maybe reverifi BANK will exist… timing could be perfect. Mortgage rates will be 5–7%, more likely on the higher side due to the requirement to keep cash in banks and offer deposit accounts reasons to keep money parked there.
2027-Year 3 of a 4 year game of toxic distressed debt. Now all of the 7 year debts are coming due and maturing, the ones from 2020, and then the 5 year debts from 2022. This is going to be a double whammy. Think of this now as 5 strikes, as 2025 was 1, 2026 was 2, so that is 3, now 2027 add 2 more compounded, and that is 5! 2027 is going to be a mess. Total messy wipe out arguably compared to the great depression and I believe this is finally when crypto currency takes over the financial markets and other related sectors. This may even be the biggest bank collapse since 2008 and will eventually lead to the largest unemployment numbers in the history of America. The feds are going to have no other solution other than to plummet interest rates to give people free money and give commercial real estate a CHANCE to survive, but it won’t be other countries buying our debt, we will be printing trillions to buy our own debt. Mortgage rates will be back down under 4% for 30 year fixed interest rates and home prices will surge even more! New York City may be a war zone.
2028- Things begin to settle back in but we aren’t out of the woods yet. The lingering issues of work outs and modifications will continue to prove broken. More tenants will be moving out of space and or negotiating much lower price points. More defaults will occur and move forward towards the litigation and foreclosure steps. This will be a major year again for NPL sales, non performing loan sales as more toxic debt will accrue and banks and lenders will write off this debt. RATES remain steady between 4–5.5% for 30 year fixed rate mortgages. Another election year and all hell is going to break loose. At this point, many office buildings will have been converted to residential housing units, the question is, who is living in them? Major cities should see an influx of new people. I am expecting a major stock market sell off regardless of the economy and regardless of who wins the election.
2029–100 year anniversary of the great depression. Is this round 2? Maybe. HARD to forecast out 6 years from now, but Exhaustion comes to mind. A major correction is due, and the world as we know it, may just be one big oyster. Bitcoin will be the preferred method of savings and payments and probably the world currency. Real Estate will be down in value across the board and interest rates will be most likely 3.5%-5% for a 30 year fixed rate mortgage.
2030 — preparing for the rebound or bounce after a terrible 2029, things should begin to look bright and rosie, but the final wave of defaults on cheap commercial debt will happen, for those that took on 10 year debts from 2020–2021. The market will have already priced in and absorbed all of the issues. While many rents will not rebound, paying down 10 years of amortized mortgage payments should be able to offset the drop in values, at least allowing people to get out of the negative. While there is no crystal ball, the market will be an entirely different landscape. The good news is real estate should be a safe entry point, and interest rates should be under 5%, as there will be no other option to save america based on the debt its accumulated.
2031. BUY EVERYTHING. This is and will be the greatest time to buy hard assets. If you plan for 2031 now, you will be able to make trades of a lifetime, buys of a life time, and investments that are extremely lucrative.
Do not let rates or fear stop you or cripply you. Be strategic, be patient. While this is not financial advice, I believe in these forecasts. Political and government interventions may throw some timings off, but overall, this is what I see looming for the real estate landscape.
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