Behaviors of displacive phase-transforming materials above the temperature of transformation, where abnormal thermal, elastic, magnetic properties are often observed, are mostly explained by intrinsic peculiarities in electronic/atomic structure. Here, we show these properties may also be attributed to extrinsic effects caused by a thermoelastic equilibrium in highly defected pretransitional materials. We demonstrate that the stress concentration near stress-generating defects such as dislocations and coherent precipitates could result in the stress-induced transformation within nanoscale regions, producing equilibrium embryos of the product phase. These nanoembryos in thermoelastic equilibrium could anhysteretically change their equilibrium size in response to changes in applied stress or magnetic fields leading to superelasticity or supermagnetostriction. Similar response to cooling may explain the observed diffuse phase transformation, changes in the coefficient of thermal expansion and effective elastic modulus, which, in turn, may explain the invar and elinvar behaviors.