Today’s Real Estate Market: The ‘Unicorns’ Have Galloped Off

 

Comparing real estate metrics from one year to another can be challenging in a normal housing market. That’s due to possible variability in the market making the comparison less meaningful or accurate. Unpredictable events can have a significant impact on the circumstances and outcomes being compared.
 
Comparing this year’s numbers to the two ‘unicorn’ years we just experienced is almost worthless. By ‘unicorn,’ this is the less common definition of the word: “Something that is greatly desired but difficult or impossible to find.”
 
The pandemic profoundly changed real estate over the last few years. The demand for a home of our own skyrocketed, and people needed a home office and big backyard.
 
Waves of first-time and second-home buyers entered the market.
Already low mortgage rates were driven to historic lows.
The forbearance plan all but eliminated foreclosures.
Home values reached appreciation levels never seen before.
 
It was a market that forever had been “greatly desired but difficult or impossible to find.” A ‘unicorn’ year. Now, things are getting back to normal. The ‘unicorns’ have galloped off. Comparing today’s market to those years makes no sense. Here are three examples:

Buyer Demand
Buyer demand is down from the two ‘unicorn’ years. But, according to ShowingTime, if we compare it to normal years (2017-2019), buyer activity is still strong.

Home Prices
2020 and 2021 each had historic appreciation numbers. Now, we’re returning to more normal home value increases.

Foreclosures
Today’s foreclosures are increases over historically low foreclosure rates.

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