Not Boom. Not Bust. Not Even Flat. Something Else Entirely.

How's the real estate market? 

It's the question I get asked most often.

And honestly, it's the hardest one to answer well. Mainly because “the market” isn't really one thing. It's a framework used to describe the collective behavior of millions of individual home sales across the country. Yet real estate itself is stubbornly, inherently hyper-local. 

So when someone says “the market,” the right response is: which one, where, and when? And when a headline skips that question entirely and makes a broad-brush claim, I mostly tune out.

Yet there's a single number that transcends every local nuance, every regional trend, every price point. And it's not home prices, appreciation trends, or mortgage rates. Those are more fun to discuss and make better stories, so it's obvious why you hear about them more. Here's the one to watch.

How many total homes trade hands in a year. Very anti-climactic, right? But stay with me.

That number measures the only thing that can't be refuted: behavior. Forget what buyers and sellers say. Or what they feel about the economy or tell friends about their plans. The truth is in what they actually do. Said simply, people vote with their signatures on settlement statements, not their sentiments.

So if you want to know how the housing market is really doing, skip the headlines and ask one question: are people in my area selling and buying?

With that question in mind, these past few years have painted a very interesting picture.

So to understand, let's quickly zoom out.

A Decade of Boring (In a Good Way)

From 2012 through 2022, existing-home sales in America averaged roughly 5.3 million per year.

Were all of those years great? Hardly. That stretch included recovery hangovers, rate hikes, mortgage and tax law rule changes, a trade war, and a global pandemic. The list goes on. Some years were sluggish. Two Corona years were wild. But through all of it, the number held. Year after year, somewhere around 5.3 million households decided to make a move, and the market absorbed them.

All of which solidified our conventional understanding of what a functioning housing market looks like. Consistent. Steady. Life happens, people move, homes trade. The machine hums.

Then 2022 arrived, rates doubled in under a year, and the whole thing seized up and set us on the path for where we are today.

The Recovery That Keeps Not Coming

In 2023 sales fell roughly 25% and yet everyone understood why. Rates went from 3% to 7% in two quarters. Affordability broke down immediately because prices were based on cheap money. So of course volume collapsed. Buyers said “no thanks.” The question wasn't whether the market would normalize. It was when.

And every year since, the industry has had an answer ready.

2023: “Once rates stabilize, buyers will come back.” Rates stabilized. Sales finished at 4.09 million, the lowest since 1995. Ok, fine, but definitely next year when… (fill in the blank).

2024: “There's massive pent-up demand. One good rate dip and it's on!” Rates fell a full point from their peak, and some loan products were flirting with the 5s. Yet sales finished around 4.06 million. Lower still. But when more homes come to market, we'll see it take off.

2025: “Inventory is finally returning. More options means more deals.” Supply increases by a good amount. Sales: roughly 4.06 million. Again.

And 2026? We're now four years in, and assuming the year finishes at the current pace, we're sitting at almost exactly the same number. Inventory has climbed to 1.54 million homes, a healthy 4.6 months of supply. Buyers have more selection than they've had in years. Prices are still up 2% year over year.

And the total number of transactions haven't moved.

Every explanation has now been tested in the real world. “It's a supply problem.” Supply returned. “It's a rate problem.” Rates dipped well below 6% and volume stayed flat. “It's pent-up demand waiting for a trigger.” Three years of triggers. No release. And the trend is down and to the right.

At some point, a slump that refuses to end stops being a slump. It starts looking like a settlement.

The 2008 Test

Here's where it gets genuinely strange.

Ask anyone to name the worst housing market of our lifetime and you'll get the same answer: 2008. The financial crisis. Foreclosure signs on every block, underwater mortgages, the whole catastrophe. It's the reference point an entire generation uses for the word “bust.”

And when we think about what a bust means, the universal ideas around fewer deals and transactions drying up come to mind. Everything about the market feels frozen. That's what makes it a bust.

But in 2008, at the bottom of the worst housing collapse in modern history, America still sold about 4.1 million existing homes, which sounds low compared to that 5.3 million average.

Yet...

In 2024, we saw fewer home sales than that.

In 2025, fewer still.

And 2026 is pacing to do it a third time.

Sit with that. We are transacting less than we did during the depths of the financial crisis. Except this time, there's no crisis. Prices in most places are actually rising. Homeowner equity is at record highs, far from underwater. There's no meaningful part of any market that we'd consider in distress. Sellers are getting solid prices, and doing it in 29 days on average.

Oh, and one more wrinkle: the country has roughly 40 million more people than it did in 2008. A meaningfully larger population transacting less than it did during its worst housing catastrophe, while everything else looks... fine.

If this were a bust, it would be the strangest bust in recorded history. It isn't one. The problem isn't the market. It's our vocabulary.

Neither Crash Nor Boom

We only have two mental models for real estate markets based on decades-long patterns.

A crash, or down market, means fewer deals at lower prices, wrapped in uncertainty. Even qualified buyers get paralyzed. Fear runs the show.

A boom means lots of deals at record prices with very little prudence. It's marked by speed, excessive optimism (good vibes, if you will), and at times outright carelessness. Whoever moves fastest wins.

Every headline, every dinner party conversation, every “how's the market?” question assumes we must be living in one of those two stories, or at least imminently heading towards one.

But look at what's actually in front of us. Inventory that's reasonable but not flooding. Rates that are stubbornly high by the standards of the last fifteen years but historically unremarkable. Buyers who are neither rushing nor gone. Sellers getting good prices but rarely great ones. And homeowners, millions of them, choosing to live with their equity rather than trade out of it for something bigger, better, or different.

Fewer deals, at higher prices, with no fear and no frenzy.

That's not a crash. That's not a boom. That's a third thing. We don't have a name for it yet.

And that's exactly why every prediction keeps missing. Every forecast is built on the old binary, reaching for crash or boom, when neither one fits this market.

Why This Is Happening (The Short Version)

The market today is fueled by equity, not income qualifications. The people holding homes, and the enormous wealth inside them, transact when they want to, not when conditions improve. And most of them simply don't need to move. Their sub-3% mortgage is the best financial product they'll ever own, and they know it.

Meanwhile, the people who need to move, first-time buyers especially, largely can't. They're down to 21% of the market, the lowest share on record, locked out by math rather than motivation.

The old 5.3-million-sale machine ran on a ladder. First-timers bought in at the bottom, which freed sellers to move up a rung, which freed the next group, all the way to the top. Today, the ladder is missing its bottom rungs, and the people on the upper rungs are comfortable right where they are.

More inventory doesn't fix that. Lower rates alone don't fix that. Which is why every predicted recovery keeps not arriving. And why the bust that's been “coming any day now” for three years keeps not showing up either.

My Take

I want to be careful here, because this could easily read as doom. It isn't.

Four million homes still trade hands every single year. That's four million households whose lives moved forward. Babies, jobs, retirements, fresh starts. The market isn't dead. It's smaller, more selective, and running on different fuel than the one we all grew up with.

And honestly? For the people who do transact, this market is more navigable than either of the old ones. No 2021-style chaos. No 2008-style fear. Homes sell in about a month. Serious buyers can actually think. Serious sellers can actually plan. The participants who show up prepared are operating in the calmest conditions in years.

The mistake isn't being in this market. The mistake is waiting for the old one to come back.

Because anyone still pricing, planning, and predicting around a return to “normal” is anchored to a machine that's been rebuilt. This is the market we have. Roughly four million transactions, executed by the serious, at stable prices, without a lot of hype one way or another.

Neither boom nor bust. Something else entirely. And the people who understand that first will make the smartest decisions in it.

If you want to talk through what that looks like for your situation, I'm here.