The Largest Seller-Buyer Gap Ever?

Hello there, it's me, Stephen Thomas, Chief Economist at Reports on Housing, and this week we got another housing debrief sponsored by Ashley Griffin with JMJ Financial, the Thibodeau Morrell Group. This week, we're going to talk about the largest seller-buyer gap ever, ever. I know, this is, headlines constantly are coming out, and this thing is blowing up on X all of a sudden. You could see what people are saying, bar chart breaking, U.S. housing market, home sellers now number buyers by 630,000, the largest gap ever recorded with thousands of likes, and then you have this, this is from Kalshi Justin, U.S. home sellers now number by home buyers by 630,000, largest gap ever, sounds familiar, and you can get a whole bunch of these over and over again. And then, buyer's market advantage fades as home seller-buyer gap narrows, or just, this actually comes from Redfin, and Redfin puts this together, and this is what their most recent one that just came out on May 12th says, it's America's Housing Market Favors Buyers, but their advantage is finally starting to shrink, and I'm going to get into what this, this is, this is, there are 47% more home sellers than buyers, and if I zoom this in, you can see that it's 46.5%, it's been going down now for a couple months, and its height was in December at close to 49%, and it's really, if you look at this, it's kind of hovering around there, and this goes all the way back to 2013, and you can see how in 2013, the, there were more sellers than buyers in 2014, and 2016, 18 is very, very, it's like right there on the line, and then it dipped way below it during COVID, and now it's been increasing since 2023, 2024, when we had more inventory, and all of a sudden, the gap started to increase, and what that was is more homeowners coming on the market, and demand remaining the same, and the gap got wider and wider. Now, we need to understand what the methodology is, so what is their analytical methodology that they utilize to come up with this, with the buyer's side of the thing, and really, on the, as far as lists, the, the, the inventory is concerned, what they're looking at, that gap for sellers, the active inventory is the number of sellers on the market, that's what they refer to as these, the number of sellers. Now, as far as buyers are concerned, this is an estimate, and what they say is, we estimated the number of buyers using proprietary Redfin data on the typical time from a buyer's first tour to close of purchase, and MLS data on active listings and pending sales. So, they kind of take this mismatch of all the analytical stuff they get off their website, and they utilize some MLS data as well, and then they come up with, with this buyer-seller gap. Now, keep in mind, remember, this only goes back to 2013, and so we need to put this in proper context, so you can understand kind of what we're talking about. It sounds very doomy and gloomy when you say there's a big, giant gap between sellers and the number of buyers, and that is very, it's the largest gap of all time. The largest gap actually was in December, but it's still very, very significant gap when you go back in that series back to 2013. But first, I wanted to bring in our sponsor before we get to the rest of the meat of this, and like I said, this one is sponsored by Ashley Griffin with JMJ Financial, the Thibodeau Morrell Group, and she's got this great HELOC program. AI-generated, instant offers, electronic documentation, self-employed, bank statements, full dock and alt dock programs. You can close as fast as seven days. Instantaneous is really what this is all about, and they can do a lot of great things. Debt consolidation, home renovation funds, need cash fast, could not get HELOC from your bank. Investors pull money from primary residence or investment residence. You can utilize this for more investment properties. So what a great program that they have. You can reach Ashley Griffin, JMJ Financial at 805-402-8125. That's 805-402-8125. That's Ashley Griffin at the Thibodeau Morrell Group, JMJ Financial. So it's proper context. We have to have the proper context. If you look at 2013 on, this is a supply and demand thing that they're referring to. The amount of supply and demand, they're just saying there's been... Demand hasn't really changed, but supply has. We've actually added more and more supply. In 2023, there was very, very little supply of homes that came on the market. Even though we had higher interest rate, demand was really low, but supply was even lower. And so we were disproportionate and actually tilted in favor of sellers. But in 2024, more homes came on the market. In 2025, even more. It was a more balanced market. In 2026, it's very, very much like 2025. It's a very balanced market. Year over year, inventory is almost identical and demand is actually a little bit higher this year than it was last year. So it's still relatively balanced. And so the context you have to take, I like to utilize National Association Realtors' data of the number of homes on the market. And the reason for that is because it goes all the way back for context to 1982, not just 2013. This goes back in time. So if you look at it, what Redfin is referring to is this period right here. That's 2013 to 2026. And if you look at the inventory levels, actually it's still, we have fewer homes than where we were prior to the pandemic. During the pandemic, it drilled down to almost nothing on the market in January of 2022. And since then, it has been rising, but it's still, it's making its way up to 2020 levels, but hasn't made its way back to pre-pandemic 2019 levels yet. And it's not going to this year either across the United States. We thought there could be a potential of that happening, but we actually have a few fewer homes coming on the market this year compared to last year. But with that said, this, you can see, this is the context that they're taking it in. And what it, where we are right now is over here on the right-hand side, and that's 1,390,000 homes across the United States. Now we need to compare it to over here where there are, where there was 4 million homes. There were 3 million homes in the fall of 2005. That first mountain range right there, because each one of those mountain ranges is a year. And the first one is 2006. The next one's 2007. And then it's 2008. And I've said it a million times before, I'll say it again. We knew the great recession was going to come based upon how lopsided supply and demand was. The metric was extremely lopsided, even though it was on life support, but subprime and everything kept it alive for a while until the whole house of cards just collapsed. Nothing like that in this current marketplace at all. Instead, we have a very, very healthy housing stock. But you see, there were a lot of homes. And you can imagine that if there, so there are a lot of homes that are on the market compared to where they, where we are today. Supply was, was a lot higher and yet demand was almost like what it is today. And, and which is lower these last few years. And, but you could see the disproportionate numbers really came during the, during the great recession. That's when we had prices, whereas there was a lot of pressure on pricing. So, and you can see, this is the pending sales data from National Association of Realtors. They have a pending home sales index. And on the right hand side is when I blow this up, you could see that there are three years that look almost identical. That's 2023. You could see the year before that 2022, it started off high and then had a just waterfall dive. Then 23, 24, 25 looked the same. And 26 looks very, very similar. And if you go back in time, you could see that demand is muted. So if you think that demand's muted, you're actually correct. We have very, very low demand. I've talked about a million times before as well. You need three ingredients for home prices to plunge. We do not typically ever have home prices plunge. It happened during the great depression and during the great recession. And only in California and a couple other states did it happen in the 1990s, the savings and loan scandal. It's usually something that is the catalyst for it, savings and loan scandal. But across the United States, values only went down 1%. California went down quite a bit, but the United States as a whole, only down 1%. No plunging prices across the U.S. And so we really don't have the recipe for plunging prices. We have low demand, but we don't have enough inventory and we don't have a lot of people that have to sell. But here we go. That's muted pending sales. Now, when I put the two metrics on top of each other, it looks kind of like this. So you could see that on the right-hand side, that's demand. And on the left-hand, blue is demand, sorry. And the orange is the inventory. And you could see right now, yeah, it's the widest it's been for a while, but when you go backwards in time, it is nothing, nothing compared to, this is from 2013 on, that's what Redfin talked about. But what I'm referring to is this, the 4 million homes that were on the market to make that gap so huge during the great recession and put a lot of pressure on prices of a lot of homeowners that had to sell that did not turn into buyers. What a lot of people don't understand is most of the inventory that's out there, these are sellers that turn into buyers. During the great recession, we had sellers that sold and did not become buyers. They lost their home to short seller foreclosure, and then they went out and rented. So way different dynamics that makes a big difference when you're trying to understand the inventory levels of where they are today. You don't have that same, I have to sell that you did during the great recession. And I'm going to show you Orange County because it's one of the few that we've been doing all of Southern California since 2012. So it's missing the context of the great recession. We've been doing Phoenix and the Bay Area and Las Vegas since about 2000, it depends upon the area, 2021, and some of them is 2022. But you can see this is actually Orange County, which goes back in time. And what I'm trying to show you is the dark blue is pending sales activity, the last 30 days of pending activity, that's what we call demand, and the inventory is the blue. And you can see that this is 2013 on, but what is missing and what's missing in Redfin's data is this. It's this section over here where you had a lot of homes on the market. There are now a little over 4,000 homes on the market in Orange County right now. And there were 18,000 homes on the market during the great recession. So that you could see that there was so many homes, there was a lot of pressure on prices, and a lot of these people had to sell. And if you remember back to the great recession, every street had at least one or two or sometimes three properties on the market. Today, you can go a year without a home being on the market in almost across the United States. So that's the big difference that's there. And I put that for proper context. So this gap that we're talking about, while it is a lot of headlines, a lot of people take it and think that, oh, this means that the market is going to plunge. And it's actually not true. It's just something taken in a context that's only from 2013 on. And that was when we were in recovery and then expansion, expansionary years for housing. And housing got really hot in 2012. It was really good in 2012. So it's missing quite a bit of historical context. And we have that historical context to help you understand the gap gets really large when prices really come down. So if you're rooting for that, this is just one more narrative that you utilize to support your argument, yet it's not actually accurate in context. You need a lot more pressure than they're talking about. They haven't had the analytical data that goes back during those times, the Great Recession. So now you understand a little bit more in proper context. And that's what we do. We're not perma bears. We're not perma bulls. We just want people to have real good data and facts and all that stuff so they can make great decisions. And I want everybody out there, if you like this, please like the video that you're watching right now, subscribe to our channel. I promised myself I would do these earlier, but I only do like one out of 10 where I say it earlier, but please subscribe and like. We'd really appreciate it. It helps out so that more and more people could see this and actually have things explained to them with somebody that is an actual housing analyst and has economic background. And this is what we do for a living. I've been doing it since 1991. So I understand it. I just want to better explain it to people. People say, you don't know what you're talking about. Shoot, I've been around since the savings and loan scandal actually helped out in foreclosures back then, then went through the great recession, went through COVID. I've been doing the economics all ever since. So go to reportsonhousing.com if you want more information. And the most recent report that came out is called, it's called Showcase Homes. And what this is, these are properties that call wow properties. A lot of properties sell instantly. There is a lot of homes. I was doing a presentation in San Diego County and it's 38% of all homes in the month of April sold above their asking price. A lot of buyers don't know the kind of market that we're in. Even in the markets that are a little bit more sluggish, you still get 10% that sell above the asking price. How come? And these are wow properties, showcase homes. They're properties that are so good that lots of buyers, more than one buyer looks at it at the same time and says, I want this. And then they compete against each other. And that's why they sell a little bit above the asking price, depending upon the market. Could be even more. So if you'd like to get that report, we have reports all over SoCal, the Bay Area, Phoenix, and Vegas. And if you'd like a free month, the coupon code is SUPPLY. So that's it. That's what we have for you today, our housing debrief. And if you have any questions, please put them in the comments. Or if you have comments, put them in the comments. We try to answer every single one. I appreciate the comments that you do bring. And if you have ideas for future episodes, let us know. Let us know what you're hearing out there or what you want to see or what your questions are. And we'll be more than happy to either do it through a housing debrief or make it a part of our podcast as well. So thank you so much for joining us for another housing debrief. Hope you have a fantastic finished your week and we will see you next week. See you on the other.