Housing Price Index Peak

[Tyler Davis]

What’s everyone’s thoughts on the crazy run and seaming spike we have in the housing price index? Are we going to have a financial meltdown similar to 2008?

[Andrew Freed]

@Tyler Davis - Great question! I can only talk about my market since that is what I know well. Regarding whether we will have another housing cash, I doubt it will be significant without inventory increasing. Take a look at the below chart, my buddy @Ian Hogan creates this for our monthly meetups which we grab from the MLS sales data. As you can see from the red vs the blue, the amount sold and the yearly sales cycle has stayed consistent since 1997 for the most part. The true differentiator when determining price reductions is the amount of listings or inventory on the market. As you can see in 2021 and 2022, the amount of inventory pretty much matches the amount sold. Based on this data, what we truly need is more supply of properties for prices to reduce otherwise the demand seems to be consuming what is available. Without more supply, I doubt we will have a crash, maybe sideways adjustment or a slight reduction but nothing dramatic in my humble opinion.