Remember the whirlwind of 2020 and 2021? The pandemic housing boom was unlike anything we’d seen before. With historically low interest rates, stimulus checks hitting bank accounts, and millions of Americans suddenly working from home, buyer demand exploded almost overnight.
Just how intense was it? Federal Reserve researchers estimate that new construction would have needed to increase by 300% just to keep up with demand during that period. Of course, that wasn’t possible, you can’t build homes as quickly as people decide they want to buy them. The result? Available inventory practically evaporated, and home prices soared. By June 2022, U.S. home prices had climbed an astonishing 43.2% above where they stood in March 2020 (49.7% in Knoxville).
A Return to Normal
Since mid-2022, the market has been catching its breath. We’ve entered what economists call a “recalibration phase”… essentially, a return to more sustainable, balanced conditions after that extraordinary surge.
Want proof? Take a look at the percentage of homes selling below their original asking price over the past several years:
| Year | Homes Selling Below List Price |
|---|---|
| 2018 | 62% |
| 2019 | 64% |
| 2020 | 55% |
| 2021 | 38% |
| 2022 | 42% |
| 2023 | 54% |
| 2024 | 58% |
| 2025 | 62% |
What This Means for You
See the pattern? We’ve returned to pre-pandemic norms, where roughly 6 in 10 homes sell for less than their initial list price. This isn’t bad news, it’s actually a sign of a healthier, more balanced market where buyers have room to negotiate and sellers need to price strategically.
If you’re buying: You likely have more leverage than buyers did a few years ago. Don’t be afraid to make reasonable offers below asking price.
If you’re selling: Proper pricing from the start is more important than ever. The days of overpricing and expecting a bidding war are behind us in most markets.
Have questions about what this means for your specific situation? Let’s talk, I’d love to help you navigate today’s market.