Active Listings of homes for sale (inventory) . . . falling, but still ridiculously high

According to the Census Bureau the US population grows about 0.4% annually.
So, one would expect some dips and peaks, but long term the # of active listing for sale should grow about 0.4%.

Right now we have a large excess of inventory for sale.

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Good. Homes are overpriced.

Still ridiculously high…

Yup. That is for sure.

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It’s really good for people selling extra houses. We just got two in inheritance. One already sold, one pending. We got more than asking price on an already overpriced house.

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Yes The window is closing but it is still a sellers’ market.
How long to the bottom? I dunno last time peak-to-trough (fat green line below) was roughly five years. But last time home prices fell a lot.

According to Redfinat the height of the 2008 Real Estate bubble an unprecedented 11% of home sales were to investors. (I have nothing against investors. I am all in favor of property investors. Still, monitoring trends in real estate investment can tell us a lot.)

Six years later that number stood at 15%
Currently that number is 18%.


I am still working this out in my mind but I think of two things is likely to happen.

  • this will contribute to bubble-and-pop, in which case homes prices will drop more-sharply than many, perhaps including myself, expect.
  • this is the beginning of some sort of watershed change away from family home-ownership (which I would see as a bad thing.)

I am still working it through in my mind. Your input is delightfully sought.

@Toll_Collector @DMK @FloridaYankee

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I’m not a money guy, so a question.

If the homes for sale inventory is high, wouldn’t that drive prices down under supply and demand?

If the inventory shrinks (fewer homes for sale), wouldn’t that tent to cause prices to increase?


It will.
An inventory this high will drive prices down. In some markets it already has.

This is a recent development and it should drive the prices down to a more reasonable level.

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It’s hard to say.

I think it depends on the area. I can speak to my area which is homes are not coming down in price and there is little inventory.

As the cost of rent starts exceeding the cost of buying a home, I can see more people wanting to move to a fixed price by buying a home.

Why pay 2,500.00 for rent if you can pay 2,500.00 or 3,000 for your own home and build equity?

On the other hand, the cost to build a new home is pretty high along with shortages and long lead times on materials, etc. Even modular and mobile homes have become pretty expensive.

Then, you have investors who are paying over asking price which keeps the asking prices high. Most realtors are going to do a search for comps when they look for bargaining power on the asking price of a home their client is looking at.

I think those factors will play into buying an existing home and keep the prices from plummeting in certain areas.

That leads to people buying existing which is keeping up in price

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The scary part is that inventory is high and so are the prices and these owners don’t have clear deeds. that means that if…our economy tanks, many may default on their loans and the banks will be holding the bag. How much can they loose? How far have these banks stretched during the times when home prices were skyrocketing…dictating how hard they’ll be hit if our economy tanks. Would this create a domino effect…that sets off the next great depression?

In CA the talk is always about converting single family homes into units for the homeless. Move them into suburban homes. They can also build ADUs. for homeless and the gov has to pay the owner. These people wanted to stop the advancing prices.

While there is some room to do that basically it all becomes
housing projects, halfway houses, section 8 or boarding houses etc. on a larger scale.

We can imagine anything we want in our minds that’s what we wind up with.

Of those, section 8 seems to work the best as long as it is decentralized.
What you are describing is basically halfway houses. Those are never trouble-free but as long as they have actual drug testing etc. they are not always a total disaster.

(I’m not saying “don’t do it.” I am saying “let’s be realistic about what will happen if we do.”)

The pushers of these projects interest investors to buy the house and get big cash monthly from the government. Similar to when. they had the State Hospitals closed and began working on. “Group Home” schemes. The promoters/politicians, get a big percentage as do contractors.

If we start off with “the free market is full of bad guys” in our minds
we will validate that pre-concieved stereotype.

I;ve done lots of work with the homeless even had them in my house many time for laundry, showers, short term stays. Throwing a handful of $50,000/yr government employees into the mix solves nothing.

Drug users are gonna drug.
Good people who recently had it bad are gonna have their bad friends over.
Kids are gonna be born.
People are gonna fall down the steps to collect a check.
People are gonna get in fist fights because “you owe me money form way back when,” or because “don’t talk disrespectful to me”

Removing the profit motive does not change this.

Many of these people should be in State Hospitals, like it used to be. Privatizing the mentally ill care for the profit motive is absurd and clearly did not work. Untrained people/owners hire minimally trained people to care for them at lower wages.
They make it a lucrative endeavor for “investors.” It’s a scheme. In the meantime moving these sad people into the suburbs is just another attempt to avoid the real costs of taking care of these people.

Making a profit on the backs of the mentally ill is a scam. There is no altruism there.

Last person I worked with intensively was a 38-year old woman who never had a job and never will.

  • She will always be able to find a doc who will write her a prescription for painkillers.
  • She will always sell her food stamps and sometimes her body— attracting the wrong clientele to wherever she lives
  • If you give her two nickels she’ll always use one to sell something (weed, laundry detergent, whatever) — attracting all sorts of people.
  • The people who wind up hanging out around her will always, from time-to-time cause the kind of trouble you can see and wish you couldn’t.
  • If the govt does not pay her rent directly, she will always wind up living in a tent or in an alley.
  • She will always be in and out of jail.

You can keep her in the city with city-not-suburban housing, but no matter what, that is how she will be.

Drawing a line between her behavior and for-profit “property investors” is like playing seven degrees of Kevin Bacon.

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State Hospitals were usually in a rural area on many acres. No sense having them walking around outside of these refuges.

There is no Kevin Bacon involved. Pig politicians find ways to profit themselves.

What I mean is if you look at her life
It is pretty darn hard to say her problems are caused by for-profit landlords being used to house the homeless.
And it is impossible to say switching low-income housing models from for-profit landlords to gov’t landlords would solve the problem.