Comparing real estate metrics from one year to another can be challenging in a normal housing market. That\u2019s 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.\u00a0<\/p>\n
Comparing this year\u2019s numbers to the two \u2018unicorn\u2019 years we just experienced is almost worthless. By \u2018unicorn,\u2019 this is the less common definition<\/a> of the word:<\/p>\n \u201cSomething that is greatly desired but difficult or impossible to find.\u201d<\/em>\u00a0<\/p>\n 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.\u00a0<\/p>\n Waves of first-time and second-home buyers entered the market.Already low mortgage rates were driven to historic lows.\u00a0The forbearance plan all but eliminated foreclosures.Home values reached appreciation levels never seen before.<\/p>\n It was a market that forever had been \u201cgreatly desired but difficult or impossible to find.\u201d\u00a0<\/em>A \u2018unicorn\u2019 year.<\/p>\n Now, things are getting back to normal. The \u2018unicorns\u2019 have galloped off.\u00a0<\/p>\n Comparing today\u2019s market to those years makes no sense. Here are three examples:\u00a0<\/p>\n If you look at the headlines, you\u2019d think there aren\u2019t 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 \u2018unicorn\u2019 years. But, according to ShowingTime<\/em><\/a>, if we compare it to normal years (2017-2019), we can see that buyer activity is still strong (see graph below<\/em>):<\/p>\n <\/a><\/p>\n We can\u2019t compare today\u2019s home price increases to the last couple of years. According to Freddie Mac<\/em><\/a>, 2020 and 2021 each had historic appreciation numbers. Here\u2019s a graph also showing the more normal years (2017-2019):<\/p>\n <\/a><\/p>\n We can see that we\u2019re 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<\/em><\/a>, the market has returned to more normal appreciation in the first quarter of this year.<\/p>\n 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\u2019s a graph with information from ATTOM<\/em><\/a>, a property data provider:<\/p>\nBuyer Demand\u00a0<\/strong><\/h4>\n
Home Prices<\/strong><\/h4>\n
Foreclosures\u00a0<\/strong><\/h4>\n