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

Comparing real estate metrics between different years can be difficult in a typical housing market due to fluctuations in the market which can make the comparison less meaningful or reliable. Unexpected events can drastically influence the circumstances and results of the comparison.

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 

Looking at the headlines might lead one to believe there are no house buyers, but the United States still averages over 10,000 house sales daily. Although buyer demand has decreased from the two ‘unicorn‘ years, buyer activity is still strong when compared to normal years (2017–2019), according to ShowingTime. (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

Expect to see unsettling headlines about the housing market this year, likely a result of inappropriate comparisons to ‘unicorn‘ years. Connect with an expert to help you keep it all in perspective.