Interesting tidbit. This should put downward pressure on prices.
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Nothing drops prices like mass foreclosures. Thatās when I bought my current home in 2012.
intercst
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This type of information is highly visible. Itās not a government statistic. It would, I think, raise quite the red flag long long before it hits the 44% point. Would not house prices be trending down all that time, more or less in concert with the over supply +/- a slight lag for the word to get on the street? Why have we been, (and still are) hearing about housing affordability and nobody can afford a house, an entire generation (āZāās I guess it is) canāt even think about buying a house in their lifetime and other hand wringing gloomage and doomage?
Which shall we believe? Houses are too expensive and out of reach for no reason I have heard put forth but they just keep saying it? Or thereās a nearly 50% surplus
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That āslight lagā can be years, depending on the situation. One issue is the locked in mortgage rates that millions of people have; they want to upgrade (or downsize) but donāt want to go from a 3% mortgage to a 6% mortgage, and who can blame them.
Everybody wants to āunlock the valueā in their newly appreciated house, but nobody wants to take the hit of lowering their price and increasing their costs to do it. The only people moving are those being transfered where the corporation will eat some of it. That doesnāt mean thereās no movement, weāve had a few houses in the neighborhood go on the market (and sell quickly) over the past 6-12 months, but all except one were people moving into retirement homes, so they had to move. Well, not āhad toā but you know what I mean.
Itās playing out slowly, far more slowly that the crtash that happened after 2008, but that was āan eventā of magnitude, this is just a slow crawl to the finish line. Iām sure prices will come down, but they will drift, not roll downwards. Give it time.
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That āslight lagā can be years, depending on the situation. One issue is the locked in mortgage rates that millions of people have; they want to upgrade (or downsize) but donāt want to go from a 3% mortgage to a 6% mortgage
To be clear, I am nor arguing here. I understand the economics of what your saying but itās more an academic concept and not what that headline is about.
US has 44% more home sellers than buyers*
Those āyearsā apparently have passed. Itās here now. And the diff between the mortgage rate people have vs what theyāll get if they sell is not a factor. At least thatās what the 44% tells me. If theyāre sellers theyāve already made peace with that.
The oversupply is here. Millenials and allied arenāt affecting these numbers much even when you hear that group not being interested in being owners. Theyāre not old enough to be a major buying cohort. There are buyers and more sellers. Whyās housing expensive? Thatās the crux. And yes, it could be a conspiracy.
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Thereās been some talk about creating a transferable 30-year mortgage that you could move to your new home. That would require some kind of Govāt subsidy to make the math work, but the cost mighty be worthwhile if it opens up the residential real estate market.
If you like your mortgage, you can keep it. {{ LOL }}
intercst
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Redfin says there are 44% more home sellers than buyers. That could be because the number of buyers has shrunk or because the number of sellers has increased.
Here it is the case of the number of buyers decreasing.
DB2
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Yep. At the current value of my home. Iād definitely be a renter. And younger people seem to have a greater understanding of the arithmetic of the ārent vs. buyā calculation.
I donāt have a mortgage. The only thing thatās keeping me in the home is the large āskimā on a sale.
intercst
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The Spring selling season will soon be here but itās a bit early. Most w children want to move in June to be settled by the start of school. Those planning to move are shopping but not ready to sign contracts.
House are too expensive is easy to understand. If you take Pre-2000 price and trend, current prices show high appreciation. I donāt think there is 50% higher inventory, rather potential buyers who cannot afford to buy have left the market.
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Very large drop in California.
Californiaās homebuying collapse is far different than the nationās sales dipā¦
California had 954,423 sales in 2023 -25, down from 1.25 million in 2007-09. So, homebuying was 24% slower over the past three years than during the housing nightmare. Yes, there are far fewer homebuyers these days than during the big crash.
However, the 12.4 million sales nationwide in 2023-25 were 13% higher than the 10.9 million in 2007-09. Not that Americans have been on a buying binge of late. The U.S. sales pace in the past three years is 6% slower than the previous 18 years. Yet California is down 31%.
DB2
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Curious. The last time you posted about California is was to tell us everybody is leaving.
Are they just leaving empty houses behind?
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Donāt know, but we do know that Californiaās population is stagnant ā it trickled up by 0.05% (five ten-thousands) in 2025. We know from the OP that nationally there are more sellers than buyers. We also know that housing is very expensive in the Golden State, so it isnāt surprising that the sales decline is greater there.
DB2
About 18% of real estate transactions in California are family members inheriting the home. Is it as āsaleā if thereās no āskimā involved?
{{ In California, inherited properties now outnumber new-home sales by more than two to one, a fact Cotality said could be attributed to the [stateās property tax rules }}
intercst
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IIRC, back in 2020 a proposition modified Proposition 13 to allow for the low tax assessment to be passed on.
DB2
DrBob2 has California derangement syndrome
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Perhaps. At he same time, as noted upthread:
The U.S. sales pace in the past three years is 6% slower than the previous 18 years. Yet California is down 31%.
That is a huge difference. As I wrote, āCaliforniaās home buying collapse is far different than the nationās sales dipā¦ā
You may not want to use the ācā word, but collapse seemed an appropriate descriptor to me.
DB2
Would it though? Seems like the banks/mortgage companies would simply get to recharge their closing cost fees again. Most of them donāt really make money off the mortgages long-term because they just get bundled and sold.
Charge a premium for the service - heck I am surprised that there is not a mortgage company out there already trying to implement this - for a fee.
Looking at the math*, I would gladly pay a $10k fee to be able to move my mortgage to a new property. That $10k would pay for itself in the first year - and my current lender would keep my loan vs the high likelihood that I might end up with a new company.
*Assuming 500k @ 3% for 10 years vs a new loan, at $380k (the remaining balance after year 10) but at 6%. 1st year interest due on $380k at 6% would be $22,600 vs $11k in interest on the original loan in year 11.
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The fact that mortgage lenders havenāt jumped at this opportunity seems to indicate that some Govāt subsidy, or guaranty against the risk of loss is required.
intercst
Or, there is a regulatory restriction.