Comparing real estate numbers from one year to another sounds straightforward. Look at what changed, calculate the difference and decide where the market is headed.
But even in a normal housing market, that comparison can be challenging. Conditions vary, and unpredictable events can change the circumstances behind the numbers. Without that context, a comparison may be less meaningful or less accurate than it appears.
The pandemic offers a clear example. It created two extraordinary housing years that were so unusual, using them as a benchmark for normal conditions offers little useful perspective.
Those were the housing market’s “unicorn” years. Understanding what made them different helps explain why buyer demand, home prices and foreclosure figures need a closer look.
What Made the ‘Unicorn’ Years So Unusual?
Here, “unicorn” means something greatly desired but difficult or impossible to find. That description captures the exceptional combination of conditions that developed in real estate during the pandemic.
The pandemic profoundly changed what people wanted from their homes. Demand for a home of our own skyrocketed. People needed space for a home office and wanted a big backyard. Waves of first-time buyers and second-home buyers entered the market.
At the same time, already-low mortgage rates fell to historic lows. The forbearance plan all but eliminated foreclosures. Home values reached appreciation levels not seen before.
Put those conditions together, and the result was far from an ordinary housing market. It was the kind of market that had long seemed greatly desired but difficult or impossible to find.
The problem comes when an extraordinary period becomes the standard for judging everything that follows. Moving away from those conditions is not the same thing as showing that every part of the market is weak.
Why the Starting Point Matters
The original post described a market moving back toward normal after the unicorn years. Its central point was not that every number looked the same as before the pandemic. It was that comparisons with an exceptional period could create a misleading impression.
A decline from unusually strong activity needs different context than a decline from ordinary activity. Likewise, an increase from a historically low level needs more explanation than the percentage change alone provides.
To keep that lesson useful, the examples below describe the conditions discussed in the original analysis. They are historical context, not a statement about market conditions whenever you happen to read this.
Buyer Demand: Lower Than a Peak Is Not the Whole Story
The original analysis challenged headlines that could leave readers thinking there were no buyers left in the market. At the time it described, more than 10,000 homes were still selling each day across the United States.
Buyer demand had fallen from the two unicorn years. That was part of the picture, but it was not the entire picture.
According to the ShowingTime comparison cited in the original post, buyer activity remained strong when measured against the more normal years before the pandemic.
Both observations belonged in the same conversation: demand was lower than during the exceptional pandemic period, and activity was still strong relative to the earlier benchmark.
What to Ask About Buyer Activity
When you see a headline about falling demand, start with the comparison rather than the conclusion.
- What period is being used as the starting point?
- Was that period ordinary or unusually active?
- What does the comparison with a more normal period show?
The goal is not to dismiss weaker numbers. It is to understand what those numbers actually say before treating a drop from an extraordinary peak as proof that buyers have disappeared.
Home Prices: Separate Slower Growth From Falling Values
The same comparison problem applies to home prices. The original post cited Freddie Mac data showing historic appreciation in each of the two pandemic-era unicorn years.
Those increases were not a useful standard for ordinary home value growth. The comparison with more normal pre-pandemic years instead showed a return toward more normal increases.
The original analysis also acknowledged several months of minimal depreciation during the latter half of the period that followed those historic gains. It then cited Fannie Mae reporting that the market had returned to more normal appreciation in the following first quarter.
Keeping that sequence intact matters. The account included extraordinary appreciation, a period of small declines and a subsequent return to more normal appreciation. It did not describe one uninterrupted pattern.
Read the Price Description Carefully
Before drawing a conclusion from a price headline, ask whether it describes slower appreciation or actual depreciation. Then ask what period provides the comparison.
“Not increasing as quickly” and “decreasing” are different descriptions. The original post’s discussion included both, at different points. A useful explanation should make that distinction clear rather than blend the two together.
Foreclosures: Put Percentage Increases in Context
Foreclosure headlines were another concern in the original analysis. Large percentage increases could sound startling because they were measured against historically low foreclosure levels.
The forbearance plan had all but eliminated foreclosures during the exceptional period. After the foreclosure moratorium ended, the post anticipated increases compared with the three preceding years.
Using information from ATTOM, a property data provider, the original analysis described those filings as moving back toward the more normal levels seen before the pandemic.
That was the important comparison. An increase over an unusually low starting point did not, by itself, explain how the number of filings compared with ordinary conditions.
None of that removes the human cost. Homeowners lose their homes to foreclosure every year, and that loss is heartbreaking for the families involved. Putting the figures in perspective should not minimize their experience.
The Bottom Line: Look Beyond the Headline
The original post warned that unsettling housing headlines would often come from inappropriate comparisons with the unicorn years. Its lasting lesson is simple: check the benchmark before accepting the conclusion.
For buyer demand, ask whether activity is being compared with an exceptional peak. For home prices, distinguish slower growth from depreciation. For foreclosures, look beyond the percentage increase to the unusually low starting point.
A real estate professional can help keep those comparisons in perspective. As a practical next step, bring a housing headline or market report you are trying to understand, along with your buying, selling or homeownership questions. Reach out to Ed Parcaut to talk through the context and what to consider next.
