Nick Gerli Profile picture
CEO of Reventure Consulting and Reventure App.
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Mar 25 16 tweets 6 min read
New home prices have collapsed by 20% from peak. 📉

With the median sale price of a new house dropping from $497k in mid-2022 to barely over $400k today.

Much faster decline than what occurred in 2008.

In case you still think "there is no housing downturn". Image 1) In the last downturn, new home prices from builders dropped 23% from 2007-2010.

Today we're at a 20% decline in half the time.

Suggesting that we could see an even bigger overall decline in this housing cycle.
Mar 12 12 tweets 4 min read
A record number of Americans are taking hardship withdrawals from their 401k.

The figure has nearly doubled over the last four years.

40% of these hardship withdrawals are to avoid foreclosure.

People are running out of money. Image 1) What's crazy about this is that most hardship withdrawals were $5,000 or less.

Meaning that people/homeowners don't have enough money to pay basic expenses and bills.

And are willing to take penalties and pay taxes on 401k for early withdrawal to cover these expenses. Image
Mar 11 8 tweets 4 min read
We're starting to see lots of price cuts show up on the US Housing Market.

Most notably - all across Florida, which has 7 of the top 10 price cut markets.📉

A high share of price cuts tends to be a leading indicator of broader declines in home values.

So watch out in Florida.Image 1) In the case of a market like Tampa, FL, you can see it just logged its highest price cut rate in six years.

34% of listings in Feb 2024 had a price reduction.

Well above the long-term norm. And almost 6x pandemic low.

Indicating a huge market shift.

Access Graph Here: map.reventure.app/dashboard?geo=…Image
Feb 1 18 tweets 6 min read
Mortgage Applications to buy a house cratered in January 2024.

To the lowest level of homebuyer demand in 30 years.

Down -14% YoY. -54% from pandemic peak. And -40% from 2019.

Home prices/mtg rates need to go down a lot to bring buyers back in. Image 1) This data comes from the Mortgage Bankers Association.

Who provides weekly updates on how many Americans applied for mortgages.

The fact that we're not seeing any type of meaningful YoY uptick in mortgage apps suggests a weak spring housing market is coming.
Jan 15 14 tweets 5 min read
The Austin, TX Housing Market is turning into a bloodbath.

Home Values already down -16% from their peak in mid-2022. 📉

Warning signal to rest of US Housing Market. Once inventory rises, all bets are off. Image 1) Despite this drop in prices, real estate in Austin is still fairly expensive.

With values remaining 20% "overvalued" compared to the long-term, multi-decade norms.

Suggesting that there will be further price declines coming in Austin. Image
Dec 14, 2023 10 tweets 4 min read
States where Home Prices have dropped the most since mid-2022: 📉

Idaho: -8.7%
Utah: -6.1%
Nevada: -6.4%
Arizona: -6.1%
Washington: -4.7%

Source: Reventure App / Zillow ZHVI Image 1) Flipping it: here are the states with the biggest price appreciation since mid-2022. 📈

Universally located in the Northeast/Midwest. Image
Dec 13, 2023 12 tweets 3 min read
Unemployment rate in America from 1955-2023.

Interesting how the unemployment rate tends to spike right after the Fed cuts rates.

Suggesting that Fed policy easing is usually a negative signal for the economy. Not a positive one. Image 1) The table below shows the timing of the first Fed Rate cut v Unemployment Spike in the last 10 recessions.

On average - the first cut comes 3 months before the unemployment rate begins to spike.

Right now - first cut in this cycle is predicted for March 2024. Image
Dec 9, 2023 13 tweets 4 min read
Congress wants to ban Wall Street from buying homes.❌🏠

And force them to sell their entire portfolio.

If that happens, watch out for home price drops in the following metros: 📉

Atlanta
Jacksonville
Las Vegas
Phoenix
Dallas

This is where Wall Street was most active. 1) Particularly in certain neighborhoods.

Like in Atlanta.

Where investors bought nearly 60% of the houses in some ZIP codes in 2022. Image
Nov 27, 2023 12 tweets 4 min read
Home Prices for Builders just crashed by the fastest level on record.

Down a massive -18% over the last year. 📉

Biggest annual decline in new home prices going all the way back to 1965. Image 1) To be more specific: the Median Sale Price of a newly built house dropped from $497k last year to
$409k this year.

That 17.6% drop is the biggest annual decline on record.

And erases close to half the gain in builder home prices since the pandemic started. Image
Nov 24, 2023 9 tweets 3 min read
Biggest Drop in Home Values since June 2022. 📉

1) Austin, TX: -15%
2) Boise, ID: -11%
3) New Orleans, LA: -10%
4) San Francisco: -10%
5) Reno, NV: -8%

Source: Zillow ZHVI / Reventure App Image 1) Geographically speaking - prices are down in Texas, the Mountain West, Northern California, and Louisana (*areas in blue).

Meanwhile - prices are still up on the East Coast of US. Particularly the Northeast/Southeast. 📈 Image
Nov 14, 2023 12 tweets 3 min read
For the first time in nearly 2 decades, Interest Rates are now comfortably higher than Inflation.

Fed Funds: 5.3%
Inflation: 3.2%

This "restrictive" monetary policy is a throwback to 1980s/90s.

When asset prices were much lower. 📉 Image 1) To get a better sense of this, let's compare Real Interest Rates (Fed Funds - Inflation) to Real Home Prices.

You can see that Home Prices started really surging back in 2001.

When Fed did initial cut into negative real rates. Image
Nov 13, 2023 8 tweets 3 min read
Wall Street investor selling house outside of Dallas.

Zestimate has tanked by 28% from its peak in mid-2022.

The current list price is almost back to where it was before the pandemic.📉

This is happening fast. Image 1) It's the same story on most of these listings.

The landlord attempts to rent the property over the summer.

Can't do it.

Then lists for sale. Image
Nov 12, 2023 16 tweets 5 min read
Wall Street investors continue to sell their houses.

Often with big price cuts.

This listing outside Houston comes from AmericanHomes4Rent.

They've cut the price by -12% to $215,000. And it's still on the market. Image 1) AmericanHomes4Rent is the 2nd largest publicly traded Wall Street Landlord.

Owning over 50,000 houses across states like Texas, Arizona, and North Carolina. Image
Oct 27, 2023 16 tweets 5 min read
America's Housing Market is the LEAST AFFORDABLE it has ever been in 2023.

With the Income Needed to Buy a House surging up to $111,000 this year. 🏠📈

That's the highest level on record. And way higher than America's $78k median income.

Simply put: people can't afford it. Image 1) To understand this more clearly: let's subtract the Income needed to Buy from the actual Median Income.

Today the Income Needed is $33k higher than the actual Income.

Biggest delta on record. By far. Image
Oct 26, 2023 11 tweets 4 min read
Something strange is going on with the Home Builder Sales figures.

New Home Sales have "bounced" back up over the last year, surprising many in the Housing Market.

Yet - Buyer Traffic at home builder sites has collapsed to the lowest level in decades.📉

What's going on? 🤔 Image 1) My first thought is that Builders might be selling homes in bulk, at discounts, to real estate investors.

This is something I've heard whispers of from several people in the market.
Oct 21, 2023 12 tweets 4 min read
Wall Street Investors are beginning to sell their houses.

This listing in Phoenix was bought by a private equity fund in 2022 at the peak of the bubble.

Now they're listing at an 11% loss.

It's just the start. Image 1) And it gets better: the owner of this property is a corporate entity called 'Hudson Sfr Property Holdings Iii'.

According to PropWire, this entity owns over 3,100 houses.

With over $3 billion of debt attached to the portfolio. Image
Oct 17, 2023 11 tweets 4 min read
Here's an ominous indicator for the Housing Market.

The 10-year government bond now yields a higher return than the Cap Rate, or profit from operating a rental property.

No wonder real estate investor demand is collapsing. More profitable to buy bonds. Image 1) Sure enough - investor purchases are way down as a result.

Particularly from the big Wall Street landlords.

Who went from buying 2.3% of all houses in 2021 to less than 0.5% in 2023.

Source: John Burns Research Image
Oct 6, 2023 14 tweets 4 min read
Wage growth is dropping fast. Down to 3.9% YoY for American Workers. 📉

That is now the lowest rate of wage growth since the pandemic started. And also below the 60-year average.

Bad news for US Economy & Housing Market. ❌ Image 1) If wage growth continues dropping, Americans won't have any hope of "catching up" to how expensive everything has become.

Whether it's home prices, rent, food, or gas.

And they will be forced to cut back spending.
Sep 20, 2023 8 tweets 2 min read
We're in the biggest Housing Bubble ever in 2023.

Home prices, adjusted for inflation, are 85% overvalued compared to their 130-year average.

The only other time the overvaluation came close was in 2006.

And we all know what happened next. 📉 Image 1) Note that from 1890 to 2000, over 110 years, home prices did not grow adjusted for inflation.

The real Case Shiller Home Price Index never went much above 100.

That's how things should be. But then something changed in the early 2000s...
Sep 8, 2023 13 tweets 4 min read
Houses are about to get a lot smaller. 📉

For the last 70 years, builders have been building bigger and bigger houses - with average SF ballooning from 1,000 to 2,500.

Just as fewer and fewer people are living in the houses.

Not sustainable. Image 1) The result is that lots of McMansion-style properties are now lingering on the market and struggling to sell. Because they are too expensive and too big.

Like this six-bedroom, 5,000 SF beast south of Nashville.

Priced at $1.2 million with very little buyer interest. Image
Aug 25, 2023 14 tweets 5 min read
Mortgage applications just plummeted to the lowest level since 1995. 📉

Down 50% from pandemic highs.

Not good. Sellers will need to reduce the price to bring buyers back in. Image 1) To be clear - these are mortgage applications to buy a house. A good indicator of homebuyer demand.

The reason demand is so low is because affordability is horrible.

Cost to buy typical home in America is now $2,800/month for mortgage and taxes. Image