The Emotional Hangover From the COVID Economy — And What it Means for Real Estate Decisions in 2026
December 27, 2025
By Elena Garrett, December 2025
Across the DFW real estate market — buyers, sellers, landlords, builders, and flippers alike — many people are still mentally anchored and longing for to the COVID-era market of 2021–2022. Not just the memories, but the expectations that those conditions were somehow “normal” — while the post-COVID real estate and financial markets are “a temporary setback.”
But the truth is simple: the 2 COVID years were Black Swan events that generated “once in a century” market reality that was powered by an extraordinary mix of government emergency spending spikes (like, stimulus checks, etc), ultra-low interest rates to create a special “jet boost” to pull the spending forward, and a temporary supply shortage that broke records. The result was a real estate Frankenstein – a powerful but artificially-created anomaly — not an economic baseline that was ever designed to last past the emergency itself.
And yet, many people are still behaving as if that the COVID emergency measures will return any moment now if they only wait long enough:
- Sellers expect bubble-level valuations to be the baseline or even a minimum, and selling at post-bubble-market prices means “giving the house away for free”
- Buyers keep waiting for ultra-cheap rates backed by the government money-printing to return
- Investors assume that rapid multi-year appreciation and rent shortages will continue as they did in the COVID years
- Flippers and builders assume that shortage of homes for sale and the buyers’ frenzy to get into good homes will go on and on.
The emotional hangover is powerful — but it isn’t harmless. It leads good people to make not-so-good decisions based on the what once was rather than the reality that is now. Here’s the good news. You don’t need another COVID-sized shock to the system to achieve your goals in real estate.
The path forward is not waiting for the Black Swan to return — it’s learning to use today’s real-world economics to create victories that are just as meaningful, but far more sustainable.
Lasting wealth is almost never built on anomalies. It’s built on mastering the everyday, gravity-bound market — through street smarts, disciplined analysis, and strategic decision-making.
What Today’s Buyers Are Still Getting Wrong About “Waiting For the Right Moment”
Many buyers in 2025 are still acting as if the market might suddenly start to behave as if it was 2019 for the prices but 2021 for the interest rates. So they wait. And wait. And wait. But when we look at the real numbers from the last three years in DFW, the story is very different from what most buyers imagine. Prices have been recoiling from COVID since 2022. Rates have been bouncing up and down but without the 3% ARP breakthroughs for the past few years.
And here’s the surprise: tiny interest-rate cuts barely move monthly payments — sometimes by as little as $20–$60 a month. Meanwhile, today’s buyers are often able to negotiate price reductions, closing-cost credits, and concessions that save far more money than waiting around for microscopic rate drops. In other words — the biggest wins for buyers today aren’t coming from the Fed. They’re coming from smart negotiation and diligent effort, rather than fall on our heads like manna from the sky.
Why So Many Sellers Feel Like the Market Is “Unfair” — And How To Handle The Current Market
Many DFW homeowners are still emotionally anchored to the frenzy of 2021–2022 — when listings attracted lines of buyers for every open house, bidding wars were common, and Zillow estimates seemed to rise every week. So when today’s buyers move not on the sellers’ timeline, aggressively negotiate repairs and price reductions, and easily walk away in the middle of negotiation, many sellers understandably feel frustrated — even insulted. But the truth is that the market hasn’t “bad.” The buyers are simply acting according to the current level of inventory and the hard limitations of their less-then-ideal mortgage payments.
Sellers who cling to “COVID-level pricing” and hard “my way or the highway” negotiation attitude often sit on the market while their more attuned home sellers quietly go under contract. The opportunity lies not in resisting the shift — but in mastering it.
Why Many Flips Lost Money in 2025 — Even When Everything Was Done “Right”
Many DFW flippers are still subconsciously expecting the kind of forgiving market we saw during the COVID boom — when strong demand could rescue almost any project, even if timelines slipped or budgets stretched. So they focus hard on executing the rehab perfectly: the right finishes, the right look, the right ARV math. But in 2025, the biggest risk isn’t the flawed renovation — it’s underestimating the tide of the competition. As most and more flippers jumped into the game attracted by COVID-era profits, beautifully finished homes started to sit… and sit… and sit on the market, slowly adjusting to the new reality. The price drops, concessions, holding costs, and investor fatigue start to snowball into larger and larger sums — leading to increasing losses even on “good” flips.
After 3 years of market adjustments, this much is clean now: selecting the right ZIP codes matters more than selecting the right countertop. Some DFW areas still bring in stead stream of eager buyers, while others are flooded and soaked in stale listings, builder competition, and unhealthy market conditions. A flip that looks like a winner on paper can quietly turn into a drag in real life — because there are simply not enough financially strong buyers to buy up all the inventory that was dumped onto the market. Many buyers are shopping but their approval limits are lower due to higher interest rates – and they are going for lower-priced homes, leaving higher-priced homes to linger.
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Why So Many Buy-and-Hold Investors Feel Overwhelmed — And How Simple Math Can Save You From Bad Deals
A lot of Bigger Pockets-inspired buy-and-hold investors are lost in the current market. With so many great homes offering deep discounts, should they jump on to grab those deals while they last? and if yes, then which home to bet their money on? Without a trained eye for cashflow, almost everything looks promising… until the numbers tell a different story.
In the situation overflowing with potentials, we recommend starting with simple, reality-based screening tools — like the 1% Rule and ZIP-code-level rent-to-price analysis. Because not every area in North Texas offers the same cashflow potential — and many of the best ZIP codes for long-term investing are not the ones people guess first. A quick, disciplined filter can instantly separate “pretty-but-painful” rentals from properties that actually pay you back month after month.
👉 Read the full Investor ZIP Code guide to see which areas still support true cashflow — and how to avoid expensive learning-curve mistakes.
- The Emotional Hangover From the COVID Economy — And What it Means for Real Estate Decisions in 2026
- Will It Be a Flip or a Flop? DFW Flipper Year-End Update
- DFW Rental Profitability – Table of Zip Codes December 2025
- TX Home Sellers Year End Update – 2025
- TX Home Buyer Year End Update – 2025
