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Nick Gerli Profile picture
@nickgerli1
Jul 24, 2024 • 6 tweets • 3 min read • Read on X
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Home builders now have 102,000 completed, unsold homes sitting on their builder lots.

This is the highest level since 2009.

Indicating a huge ramp up in supply that is likely to get worse in the second half of 2024 as buyer demand remains subdued.

Watch the builders. They are flashing lots of warnings right now about economy/housing market.Image
1) We know that this builder unsold supply will increase because the amount of homes they have UNDER CONSTRUCTION is still near the highest level in decades.

These under construction for sale homes are going to continue to convert to completed ones over the next 6-12 months. Image
2) And these homes for sale are disproportionately located in the South.

South - 299,000
West - 112,000
Midwest - 43,000
Northeast - 26,000

Nearly 65% of the entire builder inventory is located in the South. Mostly in Florida/Texas/Tennessee/Georgia/South Carolina. Image
3) Southern housing markets are facing a big risk of home prices declines in the second half of 2024, and into 2025.

Particularly in Florida/Texas, where the bubble might already be popping.
4) Check out the housing inventory in Florida right now. This is all active listings.

We spiked from a low of 47,000 in 2021, all the way up to 140,000 today.

That's the highest level going back to 2017.

Access the inventory data here: map.reventure.app/dashboard?geo=…
Image
5) Check out Texas.

Housing inventory is up to over 108,000 in the lone star state.

That's the highest level since 2017. Indicating downward price pressure.

Access inventory data here: map.reventure.app/dashboard?geo=…
Image

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More from @nickgerli1

Nick Gerli Profile picture
Apr 15
A trend we're beginning to see across the US Housing Market are record price cut rates.

That is - a very high amount of home sellers cutting the price, as a % of totaling listings.

In the case of Arizona, the price cut rate (37.6%) is at the highest level going back nearly 10 years.

The more sellers that engage in price cuts, the more downward pressure on the market, and the more likely future value declines become.

Other states where price cuts are at a record: FL, TX, CO, TN, GA.Image
1) You can see the price cut rate by state on this map from Reventure App.

The redder the state, the more sellers engaging in price cuts.

Arizona is at 37.6%. Florida is at 32.0%. Those are two markets with the most downward pressure right now. Image
2) Now of course - a price cut doesn't mean houses are automatically cheaper.

Some sellers elect to cut the price $1,000. And that doesn't make a huge difference on affordability.

But the thing to thing about is when this price cut action happens across an entire market.
Read 5 tweets
Nick Gerli Profile picture
Apr 14
What's going on in Orlando, Florida?

There are now over 13,000 houses on the market for sale.

66% above the long-term norms for spring.

Supply is spiking. And demand is not rebounding. Could this market be on the verge of another 2008-style downturn? Image
1) For context, home prices in Orlando dropped 53% in the last housing downturn from 2007-12.

The typical price of a home peaked at $264k and went all the way down to $123k. Image
2) So far, in this cycle, prices in Orlando have only started to drop.

Data from Zillow shows values are only down -0.5% in the last year.

And are still up from their levels in 2022, when the housing demand bubble peaked.
Read 11 tweets
Nick Gerli Profile picture
Mar 27
NY Fed is estimating that 9 million borrowers are now in default on student loan payments.

And that credit scores could drop 75-150 points.

Could have a big impact on housing market. Image
1) If someone's credit score drops from 760 to to 590, that is going to have a big impact on their ability to borrow.

Particularly if they're interested in buying a house and taking out a mortgage.
2) During the pandemic, student loan payments were paused, and negative credit reporting from missed payments was paused.

The result is artificially high credit scores across the US population.
Read 13 tweets
Nick Gerli Profile picture
Mar 24
It’s beginning to look a lot like 2008.

At least for home builders.

I took this picture outside a home building site 45 min north of Tampa.

They had over 20 vacant spec houses completed for sale. And are advertising 0% down mortgages to try to move the inventory. Image
1) here’s the Zillow snapshot of all the homes for sale. All of these homes were completed and move-in ready. Image
2) what’s interesting is that the builder agent told me they were going to start converting these homes to for rent.

I’m guessing it’s because they want to start on the next phase or construction, and they simply can’t do that with 20+ for sale.
Read 14 tweets
Nick Gerli Profile picture
Mar 22
Biggest inventory growth markets YoY.

Listings up 40-60%.

5 of the top 11 are California. Image
1) Overall inventory levels in California's housing market are still fairly low.

With only 0.6% of all the houses across the state listed for sale.
2) However, such sharp YoY increases in inventory indicate that a shift is taking place. More sellers are coming to market, while demand is still very low compared to pre-pandemic levels.
Read 6 tweets
Nick Gerli Profile picture
Mar 18
People are fleeing Austin, TX in droves.

The city lost -13,500 people to outbound migration in 2024.

The biggest drop the city has ever experienced.

This outmigration has now caused Austin's housing market to collapse. With home prices down -19.5% over the last two+ years. Image
1) In Travis County, which covers Austin and some surrounding areas, domestic migration was running +14,000 per year at the pandemic peak in 2020.

And has now reversed course to -13,500 per year in 2024.

That's almost a 28,000 net downward swing in movers.
2) Some of these people leaving Austin head to the nearby suburbs like Williamson and Hays County, others are going back to California and New York.

The result is a vacuum in housing demand that is resulting in massive spikes in for sale and rental inventory.
Read 12 tweets

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