8 Minute Read
What About 2025? Are We on the Brink of Another Black Swan Event?
So it sounds like it’s going to be a good year—but we’re going to have to work again. Which is fine with me.
I’m also hearing this from my bankers. None of them seem to think we’ll see rates under 6% anytime soon, and they believe the bottom will likely be around 5.5%, but that’s a few years away. Unless, of course, we have a black swan event.
I’m a big Gary Keller fan, and a few years ago, I got to attend Family Reunion. He was really straight with us about the economy—he told us 2023 was going to be a hard year, but still a good year. Everything he said that year was spot on, and I felt really prepared for what was coming. So when his remarks from this year’s Family Reunion came out, I was eager to hear them. I find that he doesn’t sugarcoat things.
According to HousingWire, Keller believes we’re moving into one of the most unpredictable economic periods in recent history. Government restructuring, layoffs, and spending cuts are shaking investor confidence, and while real estate is still moving, the market isn’t progressively getting better—it’s just not getting worse.
The market in Hattiesburg is still stable and will still have an inventory shortage, so keep in mind he’s talking nationally. But I agree with him about things being unpredictable. I think everyone who claims to know something about the economy has figured out by now that they can’t predict much these days.
Interest Rates?
Right now, they’re hovering around 6.5%, and while that’s much lower than the double-digit rates of the 1980s, it’s still high enough to make affordability a challenge. KW predicts about 4.2 million existing-home sales in 2025, which is slightly up from 2023 and 2024, but still way below the highs of the last decade.
Then Keller said: “It would take a black swan event for home prices to drop.”
There’s that phrase again—Black Swan Event.
That got me thinking—what have past black swan events actually done to real estate, interest rates, and the economy?
I’ve sold houses through five of them, so I’m really surprised I’m just now learning this metaphor.
And I also wondered—why “black swan”? Turns out, the metaphor first appeared in 2007 from an economics professor, but it actually comes from ancient Roman poetry. The Romans thought black swans didn’t exist, so they became a symbol for something extremely rare and unexpected.
So then, ChatGPT and I did a little research and put together the five black swan events I’ve lived through in my nearly 30 years as a real estate agent.
(Side note: The Millennium Bug (Y2K) and the Mayan Calendar debacle don’t count. Had they caused chaos, they still wouldn’t qualify—because black swan events are unpredictable.)
But here are five that did happen.
5 Black Swan Events That Changed Everything
1. September 11, 2001 (9/11)
The terrorist attacks of 9/11 sent the stock market into a free fall, with the Dow dropping 684 points on the first day of trading after the attack—the largest single-day loss at the time. The real estate market stalled as consumer confidence plummeted.
Impact on Interest Rates: The Federal Reserve aggressively cut rates to stimulate the economy, leading to historically low mortgage rates that helped fuel the early-2000s housing boom.
Impact on Housing Market: The market temporarily slowed as uncertainty gripped the country, but lower interest rates quickly made buying more affordable, sparking increased home sales in the following years.
2. 2008 Financial Crisis
This was the real estate meltdown of all meltdowns. Subprime mortgage lending led to a massive housing bubble, and when it burst, home values crashed, foreclosures skyrocketed, and major financial institutions collapsed.
Impact on Interest Rates: The Fed slashed interest rates to near zero in a desperate attempt to stabilize the financial system, making borrowing incredibly cheap for years.
Impact on Housing Market: Home values plunged, foreclosures were everywhere, and lending tightened as banks tried to recover. It took years for the housing market to regain momentum.
3. Fukushima Nuclear Disaster (2011)
A massive earthquake and tsunami led to one of the worst nuclear disasters in history. While the immediate effects were felt in Japan, global markets reacted, and energy policies shifted worldwide.
Impact on Interest Rates: This didn’t directly affect U.S. mortgage rates, but global uncertainty often leads central banks to keep rates lower for stability.
Impact on Housing Market: There was little direct effect on U.S. real estate, but in Japan, housing markets in affected areas were devastated, and global supply chain disruptions caused construction delays worldwide.
4. Hurricane Katrina (2005)
Katrina devastated the Gulf Coast, wiping out entire communities and causing over $100 billion in damages. In real estate, it reshaped entire markets—home values in affected areas plummeted, while places that saw an influx of displaced residents saw increased demand.
Hattiesburg, for instance, saw a huge influx of people with $150,000 cash from their insurance settlements, and they grabbed up everything under $120,000. This artificially pushed the market up, so when 2008 happened, Hattiesburg was really just having a correction.
Impact on Interest Rates: The broader economy wasn’t as shaken as during other black swan events, so interest rates remained stable, though insurance costs soared.
Impact on Housing Market: Hardest-hit areas saw widespread destruction and slow rebuilding, leading to long-term shifts in local real estate markets. Cities like Houston and Atlanta saw an influx of displaced buyers and renters.
5. COVID-19 Pandemic (2020)
Real estate went from dead in the water to absolute frenzy overnight. The Fed dropped interest rates to historic lows, money became incredibly cheap to borrow, and buyers flooded the market. Prices soared, inventory vanished, and bidding wars became the norm.
Impact on Interest Rates: Mortgage rates hit record lows, dipping under 3%, which fueled rapid price growth.
Impact on Housing Market: Demand exploded, prices surged, and inventory disappeared almost overnight. It was one of the hottest housing markets in history, but affordability became a major issue.
I think COVID did more damage to housing affordability than people realize. It drove up the cost of building materials, and now it’s nearly impossible for builders in our area to construct homes under $200,000—which is our first-time homebuyer market.
So, What’s the Takeaway?
The market will always have ups and downs. But as history has shown, real estate is resilient. People will always need houses—the key is being prepared for the unexpected.
Personally, I’m not ready for another black swan event. I think I’d rather take a 6.5% interest rate.
And just in case you were wondering—if YR4 does hit the Earth in 2032, it won’t be a black swan event. Scientists already predict a 3% chance of impact. We’ll know more next year.
In the meantime—if you’re thinking about making a move, let’s chat.
