We love comparisons, don’t we?

We compare everything from restaurants to the best place for a beach vacation.

The real estate market is no different. Headlines are often full of real estate metrics comparing one year to another, which can be a challenge even in normal markets due to variability, which can make the comparison less accurate or meaningful.

Throw in an unpredictable event, like a pandemic, and the comparisons can become almost worthless.

What does all of that have to do with ‘unicorns’?

Watch the following video, or continue reading below, to find out;

Comparing current real estate data to the two ‘unicorn’ years we just experienced does not provide a very accurate assessment of the current market. By ‘unicorn’, I’m referring to the less common definition of the word:

Something that is greatly desired but difficult or impossible to find.

Without a doubt, the pandemic changed real estate over the last few years. Rather than cause the housing market to crash, demand for homes skyrocketed as people needed a home office, or two, and big backyards became more important

Waves of first-time and second-home buyers entered the market.
Already low mortgage rates were driven to historic lows.
The forbearance plan virtually eliminated foreclosures.
Home value appreciation reach never before seen levels

In other words, it was a market that had been “greatly desired but difficult or impossible to find.” A ‘unicorn’ market!

Now, things are getting back to normal, and the ‘unicorns’ much to the dismay of many, have gone back into hiding.

Comparing the current market to the ‘unicorn’ years makes no sense, and here are just three examples of why:

Buyer Demand

Home buyers I’ve met with lately have been surprised by the number of people out looking at homes. The headlines would make you believe buyer demand has all but evaporated. While buyer demand is lower than during the ‘unicorn’ years, it’s still considerably higher than it was between 2017 and 2020, as shown on this graph from ShowingTime, who tracks buyer traffic across the country;

I can tell you that here in Frisco, and the surrounding areas, homes are receiving multiple offers, many are selling for over asking price, and the new construction models are busy.

CLICK HERE to See the Newest Frisco & Prosper Homes For Sale

Home Prices

Home price appreciation during the ‘unicorn’ years was historic. According to Freddie Mac, home price appreciation this year will return to more normal levels. You should note that Freddie Mac was previously expecting home prices to decline this year but revised their forecast based on data from the last couple of months.

Here’s a graph comparing national home price appreciation over the past several years;

I know there are many hoping to see home prices here in Frisco fall, but the reality is they already did. Home prices locally peaked in April 2022 with a median price of $760,000. By October 2022, the median price had fallen 18% to $630,000. By April 2023 the median price had risen to $665,000.

Foreclosures

You may have seen some rather startling headlines about foreclosures recently. Talk of a tsunami of new foreclosures, worse than in 2008, has been with us since the onset of the pandemic. Whilst it’s true that foreclosure filings are up, it’s important to remember these numbers are increases from historically low foreclosure rates.

Here’s a graph from ATTOM, a property data provider, showing foreclosure rates over the past several years;

Now that the moratorium on foreclosures, which had been in place for the last couple of years, has expired, an increase in foreclosure filings should be expected. Unfortunately, families lose their home to foreclosure every year, in good markets and bad ones. When you put the current numbers in perspective, you’ll see that the foreclosure filings are simply returning to historically normal levels.

Currently, there is not a significant amount of foreclosure activity in either Denton or Collin Counties.

Bottom Line

Over the next several months the unsettling headlines will continue as additional comparisons will be made between this year’s real estate market and the ‘unicorn’ years.

If you have questions about the market here in the Frisco area and want to know if this is a good time for you to consider buying or selling a home, Schedule a Call, and let’s talk about it.

The best way to stay up to date on our local real estate market is with my Weekly Market Report. See the latest stats and trends for Frisco, or any city or zip code of interest to you, by clicking here.