The Real Estate Roller Coaster Ride: From Peak to Pause
Right now, we’re in one of the most critical real estate moments I’ve seen in 20 years. But to understand where we are… we’ve got to rewind.
Let’s talk about 2021.
That year was a feeding frenzy. And it didn’t happen by accident. It was driven by historically low interest rates, easy money, and pandemic stimulus that made buyers feel like they were spending Monopoly cash. In California alone, we had over 500,000 residential transactions—one of the biggest years on record.
Everyone was rushing to buy. Everyone was overbidding. We had listings going into escrow in 3 days. Financing approvals with sub-3% rates. In many neighborhoods, the only thing more aggressive than the appreciation was the FOMO. If the real estate market was a Vegas buffet, 2021 was the moment right after they opened the doors: people rushing, elbows out, piling on more than they could eat.
But what we were really eating… was inflation.
Not just in food or gas—but in asset prices. Homes, stocks, crypto—everything ballooned. And the Fed? It watched quietly for a while, then hit the brakes hard in early 2022.
Rates went from 3% to 7% in less than a year. That snapped the party to a halt.
So why am I telling you all this? Because what we’re seeing today isn’t random—it’s the hangover from 2021’s high. People think the market is “weird.” It’s not weird. It’s digesting. And just like your body after too much Thanksgiving dinner… it needs time to process.
Now let’s talk about what came after.
Between 2022 and 2024, the California housing market didn’t crash. It didn’t explode. It just… got stuck. Like a traffic jam with no accident. Or better yet—like a body that binged and suddenly locked up.
It was real estate constipation—plain and simple.
Here’s what caused it:
• Interest rates doubled in 12 months, catching buyers off guard
• Sellers locked into 2.5–3.5% mortgages had no reason to move
• Affordability tanked. Payments on the same house jumped 30–50%
• Inventory dried up. Not because homes disappeared—but because no one wanted to sell
What we had was a logjam. Not a crash, not a panic. Just a market holding it in.
Unemployment remained and remains at all time lows, while the stock market and bitcoin continue to break records.
And the numbers prove it:
• In 2021, California had ~540,000 residential sales
• In 2022, that fell to ~370,000
• In 2023, we dropped further to ~280,000
• By 2024, we were hovering near ~260,000—the lowest in modern history
Compare that to the 2008 crash: back then we had similar transaction drops, but for totally different reasons. That was financial panic, bank failure, short sales, and distressed sellers. This? This was inertia. Gridlock. Nobody moving.
I call it the golden handcuffs era. Sellers had great loans, great payments—and no reason to give that up unless they had to. Meanwhile, buyers were staring at 7% loans and shrugging: “No thanks.” So, what broke the stalemate? It hasn’t broken yet. But it’s close. The pressure is building.
This is the third and final letter in this short series—but it’s the one that matters most. Because what happens next… is where the opportunity lies.
We’ve had the feast (2021), followed by the three-year market backup (2022–2024). Now, in 2025, pressure is building. We are either headed for relief… or reflux.
Let me explain:
Right now, interest rates are still hovering in the high 6s and low 7s. The Fed has been stubborn. But election-year pressure—especially from Trump—is intensifying. He’s blasting the Fed chair. He’s demanding rate cuts. And with inflation cooling, we’re finally seeing some cracks in the resistance.
If rates drop—even by 0.75% to 1.00%—we will likely see:
• A flood of sidelined buyers come back to the table
• Homes sitting stale finally move
• A surge in prices in desirable neighborhoods with limited inventory
• Multiple offers return (though not at 2021 levels)
But if rates don’t move?
We’ll likely stay in this slow-cooked pressure cooker through the end of the year. Buyers will negotiate harder. Sellers will get worn out. And properties will move—but only the ones that are priced clean and marketed well.
In either case, here’s what I believe:
• The worst of the freeze is behind us
• The next 6–12 months are a rare window—before demand and price converge again
• Luxury and mid-tier homes are about to split—one will recover first, and fast
This is the time to position, not panic. If you’re thinking of making a move—selling, buying, upgrading, downsizing—this summer and fall might be your best shot before we see another rate cycle whiplash.
Just like a traffic jam, the moment it breaks open—you want to be in motion, not stuck behind the wheel still deciding.
Let’s talk strategy.
Opportunity doesn’t disappear in a shifting market—it just changes shape.
While others are frozen by uncertainty, smart buyers and sellers recognize that shifts create space: space to negotiate, to upgrade, to reposition, to move without the noise of a feeding frenzy. This isn’t 2021. You’re not competing with 10 blind offers. This is strategy season.
The market isn’t dead—it’s dynamic. And for those who move with intention instead of emotion, this shift may be the best opportunity we’ve had in years.
🔄 1. Buyer Psychology Is Shifting - Fear is turning into fatigue—many buyers are tired of waiting. As soon as rates tick down (even a little), those on the sidelines will jump in. This creates sudden bursts of demand in specific neighborhoods or price brackets.
🏠 2. Inventory Is Rotating, Not Growing - Sellers aren’t flooding the market—but motivated sellers are adjusting. We’re seeing sharper pricing, cleaner listings, and more “quiet deal” opportunities. Some listings still sit. Others move fast with 1–2 smart offers. It’s surgical.
📉 3. Rates, CPI, Fed moves = Constant Micro-Shocks - Every inflation report, Fed meeting, or Trump soundbite affects momentum. These changes ripple through buyer behavior almost instantly—causing dips, pauses, or surges. Savvy investors and homeowners can ride these ripples to time their moves.
📊 4. Certain Micro-Markets Are Hot While Others Sleep - Westside luxury may be quiet, while starter homes in Burbank ignite bidding wars. Price sensitivity, lifestyle shifts, and investor activity are pulling different levers in different areas.
Bottom Line:
The market isn’t still—it’s alive, volatile, and responsive.
It’s not about waiting for “the market” to move.
It’s about knowing which part is moving right now, and positioning yourself there before everyone else sees it.