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

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 

If you look at the headlines, you’d think there aren’t any buyers out there. We still sell over 10,000 houses a day in the United States. Of course, buyer demand is down from the two ‘unicorn’ years. But, according to ShowingTime, if we compare it to normal years (2017-2019), we can see that buyer activity is still strong (see graph below):

Home Prices

We can’t compare today’s home price increases to the last couple of years. According to Freddie Mac, 2020 and 2021 each had historic appreciation numbers. Here’s a graph also showing the more normal years (2017-2019):

We can see that we’re returning to more normal home value increases. There were several months of minimal depreciation in the second half of 2022. However, according to Fannie Mae, the market has returned to more normal appreciation in the first quarter of this year.

Foreclosures 

There have already been some startling headlines about the percentage increases in foreclosure filings. Of course, the percentages will be up. They are increases over historically low foreclosure rates. Here’s a graph with information from ATTOM, a property data provider:

There will be an increase over the numbers of the last three years now that the moratorium on foreclosures has ended. There are homeowners who lose their home to foreclosure every year, and it’s heartbreaking for those families. But, if we put the current numbers into perspective, we’ll realize that we’re actually going back to the normal filings from 2017-2019.

Bottom Line

There will be very unsettling headlines around the housing market this year. Most will come from inappropriate comparisons to the ‘unicorn’ years. Let’s connect so you have an expert on your side to help you keep everything in proper perspective.

15 Properties
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4
Beds
3F11/2
Baths
2,450
Sq.Ft.
1998
Year Built
9
Days on Site
20240017345
MLS
$100,000
Neighborhood: Somerset Square
2
Beds
1
Baths
896
Sq.Ft.
1965
Year Built
10
Days on Site
20240017452
MLS
$245,000
Neighborhood: Lasalle Gardens (Plats)
4
Beds
1F11/2
Baths
1,683
Sq.Ft.
1912
Year Built
10
Days on Site
20240017444
MLS
1
Beds
1F11/2
Baths
7,600
Sq.Ft.
1979
Year Built
30
Days on Site
20240012313
MLS
7,600
Sq.Ft.
34
Days on Site
20240011369
MLS
2
Beds
1
Baths
720
Sq.Ft.
1943
Year Built
34
Days on Site
20240011313
MLS
2
Beds
1
Baths
936
Sq.Ft.
1941
Year Built
34
Days on Site
20240011318
MLS
39.48
Acres
37
Days on Site
20230058691
MLS
$30,000
Neighborhood: Elm Park Sub
0.12
Acres
37
Days on Site
20230104595
MLS
$750
Neighborhood: Arthur J Robertsons Add
3,234
Sq.Ft.
37
Days on Site
20230101604
MLS
4
Beds
1F11/2
Baths
1,580
Sq.Ft.
1978
Year Built
38
Days on Site
61050133903
MLS
2
Beds
1F11/2
Baths
19
Sq.Ft.
44
Days on Site
81024007407
MLS

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