Unicorn Years: How Are They Affecting Annapolis Home Valuations?

Navigating the Annapolis real estate market can be a complex task, particularly when comparing metrics from different years. The past couple of years, often referred to as the 'unicorn' years, were unique due to the pandemic and its significant impact on the Annapolis housing market. The term 'unicorn' here signifies something greatly desired but difficult or impossible to find.

During these years, the demand for homes in Annapolis, especially those with home offices and large backyards, surged. We saw waves of first-time and second-home buyers entering the Annapolis real estate market. Mortgage rates hit historic lows, foreclosures were almost eliminated due to forbearance plans, and home values in Annapolis appreciated at unprecedented levels.

However, as we move forward, the Annapolis housing market is returning to normalcy, and the 'unicorns' have galloped off. Here are three key aspects to consider:

Buyer Demand

Despite what the headlines might suggest, there are still plenty of home buyers in Annapolis. While the demand has decreased compared to the 'unicorn' years, it remains strong when compared to the more normal years of 2017-2019. According to the real estate website ShowingTime, a leading real estate showing management and market stats technology provider, buyer activity in the Annapolis real estate market is still robust.

Home Prices

The past couple of years witnessed a historic appreciation in home prices in the Annapolis housing market. However, we are now seeing a return to more normal home value increases. Freddie Mac, a public government-sponsored enterprise, reported historic appreciation numbers for 2020 and 2021. There were a few months of minimal depreciation in the second half of 2022, but Fannie Mae reports another government-sponsored enterprise, the Annapolis real estate market has returned to more normal appreciation in the first quarter of this year.

Foreclosures

With the end of the moratorium on foreclosures, we are seeing an increase in foreclosure filings in Annapolis. While this might seem alarming, it's important to remember that these are increases over historically low foreclosure rates. ATTOM, a leading property data provider, suggests that we are essentially returning to the normal filings from 2017-2019.

Maintaining Perspective

While there might be unsettling headlines about the Annapolis housing market this year, it's crucial to keep things in perspective. Most of these headlines result from comparisons to the extraordinary 'unicorn' years. As potential home buyers or sellers in Annapolis, it's important to consult with a real estate professional to help you navigate the market effectively.

Remember, every market shift presents new opportunities. Whether you're looking to buy or sell in the Annapolis real estate market, understanding these changes can help you make informed decisions and take advantage of the current market conditions.