NORMAL IS BROKEN
I often hear people say, “The real estate market is finally getting back to normal. I disagree.
We are experiencing a new real estate market—one shaped by circumstances we have never experienced before. As Realtors, we need to adapt, but more importantly, we need to help our clients understand what has changed so they can make smart decisions about their homes, finances, and lifestyles.
My job is not simply to help someone buy or sell a house. It is to help them make the right housing decision for the stage of life they are in.
A NEW REALITY
A “normal” real estate market has historically meant roughly five million transactions a year. In 2006, we reached a national high of approximately seven million. Today, we are looking at historically low transaction levels of around four million annually.
For years, we have blamed this primarily on low inventory. Inventory is improving, particularly in the Northeast, but the bigger story is that the people who make up the housing market have changed.
The biggest challenges are affordability and the changing transfer of wealth between generations.
When I bought my first home, the average first-time buyer was 27. Today, it is approximately 41.
In 1960, about 52% of adults under 30 were married and homeowners. Today, that figure is closer to 12%. More young adults are also living at home with their parents.
These aren’t simply real estate statistics. They represent significant lifestyle changes.
IT’S NOT JUST ABOUT INTEREST RATES
Most people think today’s housing challenges are primarily about mortgage rates and home prices. They are important, but the larger issue is that the entire housing equation has changed.
The exceptionally low mortgage rates we saw during COVID were extraordinary and temporary. We should not make long-term decisions based on the expectation that those rates will return.
Home prices are likely to continue rising, although at a much slower pace. At the same time, homeowners today have substantial equity, making a dramatic nationwide price decline less likely.
Waiting for the market to return to what it was may not be a strategy.
THE SILVER TRICKLE
For years, we predicted a “silver tsunami”—Baby Boomers selling their large homes and moving into smaller, more manageable properties. Instead, we are seeing a silver trickle.
People are living longer, staying healthier, remaining in their homes longer, and often keeping their second homes. That means the transfer of housing wealth to younger generations is happening more slowly than many expected.
At the same time, today’s younger generations are increasingly becoming the Sandwich Generation—caught between children who may return home and aging parents who may eventually need to move in.
This is already changing the type of homes families need. Some are selling two homes and purchasing one larger, multigenerational home. Others are relying on parents to help with down payments or financing.
So I ask a young or first-time buyer:
“How much are your parents willing and able to help you with?”
And when I meet with a Millennial considering selling:
“What are the plans for your children—and what are the plans for your parents?”
Those answers can dramatically change the housing decision.
THE RIGHT HOME AT THE RIGHT TIME
Understanding these changes allows me to provide better advice. We need to talk about financing, affordability, family dynamics, and realistic expectations. Sometimes the best solution isn’t the home someone originally imagined. It may be a different home, location, financing strategy, or timeline.
The goal isn’t simply to own a bigger or more expensive home. The goal is to own the RIGHT home for the stage of life you are in. The right home should support your financial stability, your safety, your family, and ultimately your happiness.
The market may never go back to the way it was.
And that doesn’t necessarily mean the future is worse.
It simply means we need to understand the new reality—
and make decisions based on where the market is going, not where we wish it would return.