For the trend-spotters whose job it is to keep on top of the U.S. real estate market, it’s been a rough couple of years. The big miss for most came with the pandemic, which threw all the normal market rhythms seriously askew. Real estate offered no exception. As the New York Times’ banner headline lamented last week, “Will Real Estate Ever Be Normal Again?”
The best answer for the real estate future is, ‘Don’t count on it anytime soon.’ That’s a prediction that can be made with more certainty than usual because off-kilter selling patterns are already showing up in markets all over the U.S.
The latest “normal” phase to be threatened is the customary holiday season sales slump. There are traditional reasons for that pause in real estate activity (weather is the least significant). It’s just human nature. Sellers who aren’t under immediate pressure to sell would rather not disrupt family plans during the holiday season, just as buyers tend to delay their real estate forays for the same reason.
But this year has been looking different, reflected in a breathless quality evident in national media reports. They often focused on inflation, leaving the unmistakable impression that it was heaping added pressure onto decision-makers. Some of last week’s examples:
Zillow economist J. Tucker: “…the cost of building materials and appliances and light bulbs and paint is rising….”
Realtor.com: “Real estate has historically been viewed as a hedge against inflation.”
Yahoo.com: “Real estate experts say this holiday season won’t come with the typical slow in the housing market…”
CNBC: “An unusual surge in home buying, just as the market enters the historically slow holiday season, is driving mortgage demand higher.”
CNBC seemingly couldn’t help itself, adding, “With rising inflation and a hot housing market, here’s what you need to know about buying a home right now.” All in all, it seemed as if the traditional year-end real estate market slowdown had gone missing.