5 Types of Homes That Will Plummet in Value in 2024
Written by
Greg Garrison, AI Editor
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As the real estate market and mortgage rates constantly evolve, certain home types are more likely to decrease in value in 2024.
This trend can be influenced by factors like economic conditions, shifts in buyer preferences and environmental policy changes. Understanding these dynamics is crucial for homeowners, investors and potential buyers alike.
Here are five types of homes that are likely to see a decline in their market value in the coming year:
Homes in Climate-Vulnerable Areas
Homes in regions prone to climate-related disasters, like coastal areas susceptible to hurricanes, flood zones and regions at high risk of wildfires, could significantly drop in value.
The increasing frequency and severity of climate-related disasters have heightened awareness and caution among buyers. Insurance costs in these areas are skyrocketing, and in some cases, insurance companies are withdrawing coverage altogether. This makes homes in these regions less attractive to buyers, decreasing demand and, consequently, lowering property values.
Outdated Single-Family Homes
Single-family homes that have not been updated or renovated in decades don’t hold as much appeal to buyers. Today’s homebuyers are looking for modern amenities, energy-efficient systems, and homes that require minimal renovation.
Properties that are outdated, with old heating systems, poor insulation, outdated kitchens, and bathrooms, or that lack smart home technology, are becoming increasingly difficult to sell at premium prices.
As buyer preferences continue to evolve towards modern, sustainable, and tech-friendly homes, the gap in value between updated and outdated homes is expected to widen.
Luxury Urban Condos
The pandemic shifted people’s preferences from dense urban living to more spacious suburban or rural homes. This trend may continue into 2024, affecting the value of luxury urban condos. High-end condos in city centers, which once commanded premium prices for their location and amenities, are facing decreased demand.
As remote work becomes more normalized, people prioritize space and comfort over proximity to urban job centers. Additionally, the high maintenance fees associated with luxury condos are becoming a deterrent for buyers, decreasing these properties’ values.
Homes Near Polluting Industries
Properties located near polluting industries, like factories, refineries or heavily trafficked highways, are expected to decline in value. Increasing awareness and concern over environmental health and air quality influencing buyer preferences.
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Homes in these areas are often subject to poor air quality, noise pollution, and other environmental hazards, making them less desirable. As the market shifts towards healthier living environments, these homes are expected to decrease in attractiveness and value.
Oversized Properties in Declining Neighborhoods
Oversized properties, particularly those in neighborhoods experiencing economic decline or with diminishing local amenities, are projected to decrease in value. These homes often come with high maintenance costs and property taxes, which can be a significant burden without the corresponding lifestyle or community benefits.
As smaller homes and communities with strong local amenities and economies become more popular, the demand for large properties in declining areas wanes, leading to a drop in market value.
Why These Homes May Decrease in Value
Several factors contribute to the predicted decline in the value of these home types. Economic uncertainties, changing buyer preferences towards sustainability and modern amenities, and the impact of climate change are primary drivers.
Furthermore, the shift towards remote work alters traditional property demands in urban centers. The real estate market is highly responsive to these trends, and homes that don’t align with emerging preferences or face increased risks will likely dip in value.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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