Real
estate isn’t just about bricks and mortar — it’s about human behavior. Just like fashion trends or fitness
crazes, housing markets flare up, peak, and cool down, driven as much by
psychology as by economics. Understanding this can help buyers make smarter,
more strategic decisions.
2017: The
Over-Ask Era
I remember
finishing a CrossFit class when I overheard a conversation. A woman had finally
secured a home after losing out on several offers. Her friend asked, “How much
over asking did you pay?” With a mix of pride and relief, she said, “$110,000.”
Back then, paying far above the list price wasn’t shocking — it was expected.
2021: The
Pandemic Frenzy
Fast forward
to late 2021. I was hosting an open house at a vacant property and looked
outside at the lineup: 50 groups of buyers, patiently waiting with masks on,
inching forward under COVID restrictions. Each hoped to get into a market that
seemed unstoppable. Bidding wars weren’t the exception — they were the rule.
2025: The
Cool-Down
Now, the
market looks very different. A home in my own neighbourhood has lingered on and
off the market for months without selling. The frenzy has cooled, lineups are
gone, and market reality has returned.
What
Drives a Hot Housing Market?
It’s
tempting to blame mortgage rates alone — low rates encourage buying, high rates
slow it down. But the full picture is more complex:
·
Economics: Low
mortgage rates, limited housing supply, and growing populations push demand.
·
Psychology:
Fear of missing out (FOMO) drives buyers to act quickly, while herd mentality
keeps pushing prices higher.
·
Media Influence: Headlines amplify urgency, making housing the hottest topic everywhere —
from coffee shops to social media feeds.
The Power
of Social Proof
Trends don’t
spread in isolation — they rely on social proof:
·
When
a celebrity buys a luxury home, it sparks aspiration, making buying seem
timely.
·
When
someone in your circle — a savvy investor or a colleague “who always knows” —
makes a purchase, it legitimizes the trend.
Early
adopters give everyone else “permission” to follow. Suddenly, buying a home
isn’t just a financial decision — it’s a social event of the season.
Human
Nature, FOMO, and Greed
Housing
markets move on emotion as much as math. We buy because our neighbour bought,
sell because our cousin did, and hold because the headlines say values will
only rise. FOMO sparks the frenzy, and greed keeps the fire burning — often
long after warning signs appear.
Right now,
the frenzy has cooled. Mortgage rates are higher, home values have reset,
and buyers are taking a step back. Historically, those who act during a
market lull — the early adopters — often come out ahead when the next wave
rolls in.
How to
Buy Smart in Today’s Market
If you’re
ready to get in at what could feel like the “ground floor” before values rise
again:
1. Connect with a mortgage broker for pre-approval.
2. Partner with a full-time local
realtor who knows
your neighbourhood.
3. Make decisions with your head, not
your heart.
Leave the
FOMO to others. Buy smart. Buy with your head.
