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s we bid farewell to 2024 and welcome 2025, I'm filled with optimism about the real estate market's future prospects. Despite some unpredictability throughout the year, 2024 has been a positive time for real estate, offering a much-needed respite from previous years' frenetic pace.

    In Flagstaff, we've seen 1,441 homes sold through October, just 58 more than last year. Mortgage rates have dropped by about 1% compared to this time in 2023, resulting in monthly payments that are approximately $275 lower for new entrants into the market. The median sales price has increased modestly by 4.21%, reaching $594,000.

    These numbers paint a picture of a stable and upward-trending market, far removed from the breakneck speeds and skyrocketing prices of 2020-22. We're witnessing a normalized pace that aligns with the Federal Reserve's goal of curbing inflation. While it's essential to acknowledge that things will never return to their pre-pandemic state, this new equilibrium is a welcome development.

    The Millennial Wave continues to shape the market, driven by low inventory and high demand for housing. This imbalance has been exacerbated by a surge in population growth, particularly among 25- to 30-year-olds who are entering the home-buying market. Arizona's ranking as one of the fastest-growing states further underscores this trend.

    The only factor holding back values is interest rates, which remain higher than what most consider "normal." However, with rates expected to drop to sub-6% by early 2025, we may see a significant shift in the market. A potential 5% handle on interest rates could be the catalyst for a "big rate thaw," as buyers and move-up buyers alike will be eager to take advantage of more affordable mortgage options.

    As we look ahead to 2025, I remain optimistic about the prospects for home ownership. With a positive economic outlook and a more gradual rate reduction, those seeking to enter or upgrade their homes have reason to be hopeful. By seeking expert advice, creating a plan, and working diligently towards that goal, homeownership remains within reach for hardworking individuals who are committed to making their American dream a reality.