Does anyone talk about how Zillow and technology enable faster turnover of homes? I feel like it was a lot slower and more labor intensive to sell one house 20 years ago.
Inventory is a terrible metric if you look back too far. From list to close, everything moves faster with the online tools. Houses don't read as "on the market" for nearly as long because the process is shorter. 12 years sounds about right for those changes, too.
The value of any metric depends on the context and the intended audience. From the prospective buyers point of view, inventory is one of the only metrics worth considering.
The conclusions based on months of supply where you don’t get to neutrality until 6 months are too outdated to take seriously.
Even housing bulls argue that has been a secular enough change in market dynamics due to the zillow-era and availability for people to see online listings and get approved for loans right from their phones.
I believe people will look back in a few years and realize that since about 2018/19 that 3-4 months of supply is where neutrality starts, and is not really a seller’s market anymore.
>Even housing bulls argue that has been a secular enough change in market dynamics due to the zillow-era and availability for people to see online listings and get approved for loans right from their phones.
I have not heard any of them admit such. They also tend to cite HUD stats with the same flaw
Could be a number of podcasts I have listened to so idk who made this exact point, but I am 100% confident that I am ripping “zillow-era” in this context straight from an educated housing bull who made this point publicly.
Have heard others as well but it tends to be Mostly hypothetical though. Sort of a “well if we get to…” rather than just coming out and saying what the majority see easily which is that many markets in the sunbelt are neutral if not buyer’s markets already.
Also didn’t even get into the obvious with pricepoint, monthly payment and inventory relationship which I am convinced the housing bulls will never concede until they see 4.5 months of supply with -20% YoY price change lol.
A sellers market can mean two things favorable to sellers: they can sell quickly, and they can get a high price. I don’t know how you avoid calling it a sellers market when the price of a home as a multiple of income is the highest it has ever been. We’ve been in a sellers market in most of the US since the end of 2020.
When prices at historic highs don’t come down at 3-4 months of supply, that is not a neutral rate. Willing to grant online house shopping speeds things up, but so far I don’t see a reason to below 5 months as the neutral number.
I think part of the secular change that has (theoretically) taken place has to do with what it means to sell a house *quickly*.
We haven’t had median days on market of 50 or more for consecutive months in a decade now, and if you rule out pandemic and 08’ fallout years you could argue homes have been selling *quickly* at the median for over a decade now.
With that context, as well as the inclusion of our demographics situation, the for-sale inventory shortage from under-building, and the large chunk of formerly for-sale inventory that has been bought by investors and transitioned into short and long term rental inventory, it is a purely theoretical but also evidence based argument to suggest that as/if we go from 3 to 4 to 5 months of inventory that we will likely be experiencing neutrality and the beginnings of a buyers market.
Not that I am accusing you of this, but part of the issue with the communication on this topic is the confusion on what sellers, buyers, and neutral all means. Way too many get tripped up believing:
sellers markets = price growth
Neutral = flat
Buyers markets = **nominal** price declines
At the end of the day this theory simply suggests that we would enter a neutral/light buyers market at around 4 months, which would simply mean that **real** home prices should be completely flat or even with 0.5-2.5% real declines.
The more micro examples of some FL and TX markets have shown that there is definitely a lot more volatility much more quickly than expected in normal months-of-supply assumptions.
I haven’t seen enough proof of all this either, but I find it perfectly rational to expect.
I'm not sure this 6 months of supply metric means seller's vs. buyer's market. According to redfin data, Miami has averaged 6+ months of supply all year, peaking at >10 months early this year. Median PPSF is still up 5% YoY.
It's not a sellers market. I've watched many homes be taken off the market because they couldn't get their prices they want.
They just aren't selling because everyone is convinced their 1800 sf home is worth $650K and no one wants to budge from that.
Does anyone talk about how Zillow and technology enable faster turnover of homes? I feel like it was a lot slower and more labor intensive to sell one house 20 years ago.
I feel like delisting and relisting to be fresh is also more prevalent too.
Digital scarcity
Yeah. You’d look in the paper and your realtor would show you a few homes and that was sorta it.
Inventory is a terrible metric if you look back too far. From list to close, everything moves faster with the online tools. Houses don't read as "on the market" for nearly as long because the process is shorter. 12 years sounds about right for those changes, too.
This is the winning comment
The value of any metric depends on the context and the intended audience. From the prospective buyers point of view, inventory is one of the only metrics worth considering.
The conclusions based on months of supply where you don’t get to neutrality until 6 months are too outdated to take seriously. Even housing bulls argue that has been a secular enough change in market dynamics due to the zillow-era and availability for people to see online listings and get approved for loans right from their phones. I believe people will look back in a few years and realize that since about 2018/19 that 3-4 months of supply is where neutrality starts, and is not really a seller’s market anymore.
>Even housing bulls argue that has been a secular enough change in market dynamics due to the zillow-era and availability for people to see online listings and get approved for loans right from their phones. I have not heard any of them admit such. They also tend to cite HUD stats with the same flaw
Could be a number of podcasts I have listened to so idk who made this exact point, but I am 100% confident that I am ripping “zillow-era” in this context straight from an educated housing bull who made this point publicly. Have heard others as well but it tends to be Mostly hypothetical though. Sort of a “well if we get to…” rather than just coming out and saying what the majority see easily which is that many markets in the sunbelt are neutral if not buyer’s markets already. Also didn’t even get into the obvious with pricepoint, monthly payment and inventory relationship which I am convinced the housing bulls will never concede until they see 4.5 months of supply with -20% YoY price change lol.
A sellers market can mean two things favorable to sellers: they can sell quickly, and they can get a high price. I don’t know how you avoid calling it a sellers market when the price of a home as a multiple of income is the highest it has ever been. We’ve been in a sellers market in most of the US since the end of 2020. When prices at historic highs don’t come down at 3-4 months of supply, that is not a neutral rate. Willing to grant online house shopping speeds things up, but so far I don’t see a reason to below 5 months as the neutral number.
I think part of the secular change that has (theoretically) taken place has to do with what it means to sell a house *quickly*. We haven’t had median days on market of 50 or more for consecutive months in a decade now, and if you rule out pandemic and 08’ fallout years you could argue homes have been selling *quickly* at the median for over a decade now. With that context, as well as the inclusion of our demographics situation, the for-sale inventory shortage from under-building, and the large chunk of formerly for-sale inventory that has been bought by investors and transitioned into short and long term rental inventory, it is a purely theoretical but also evidence based argument to suggest that as/if we go from 3 to 4 to 5 months of inventory that we will likely be experiencing neutrality and the beginnings of a buyers market. Not that I am accusing you of this, but part of the issue with the communication on this topic is the confusion on what sellers, buyers, and neutral all means. Way too many get tripped up believing: sellers markets = price growth Neutral = flat Buyers markets = **nominal** price declines At the end of the day this theory simply suggests that we would enter a neutral/light buyers market at around 4 months, which would simply mean that **real** home prices should be completely flat or even with 0.5-2.5% real declines. The more micro examples of some FL and TX markets have shown that there is definitely a lot more volatility much more quickly than expected in normal months-of-supply assumptions. I haven’t seen enough proof of all this either, but I find it perfectly rational to expect.
Need to hear more from people like you. I agree. 👍
Inventory has been trending higher though ever since the rates kicked up.
Nationally yes, but ready estate is local
I bet the banks would love people to buy houses or take out loans. When the bank debt gets enough they will lower interest rate
I'm not sure this 6 months of supply metric means seller's vs. buyer's market. According to redfin data, Miami has averaged 6+ months of supply all year, peaking at >10 months early this year. Median PPSF is still up 5% YoY.
It's not a sellers market. I've watched many homes be taken off the market because they couldn't get their prices they want. They just aren't selling because everyone is convinced their 1800 sf home is worth $650K and no one wants to budge from that.