Nearly 2/3 of Home Listings Have Been Sitting on the Market Longer Than a Month | Hacker News Reader

Nearly 2/3 of Home Listings Have Been Sitting on the Market Longer Than a Month

redfin.com

29 pointstoomuchtodo46 comments

The ones sitting want 20% more than sometimes literally the same house sold for last year, and also need $20k-$50k of work. Or, the owner looked around and saw what good houses are going for and is asking that for their house that has [some critical flaw in location or character or condition].

At least in the market I’m looking in.

The good ones go inside three days… and way over asking price.

Yup.

A few seen in recent history:

- one with multiple roof leaks, while not disclosing any knowledge of water intrusion

- one where the whole floor, in multiple rooms, was moist, and turned out to be contaminated from a sewer leak that went horizontal

- one historic building were one exterior brick wall was falling apart and the attic part of the brick chimney was shaped like _/\_

These sound like $2m+ houses that’ll sell 50% over asking in two days, if they’re in the bay area!

This is up from 60% a year ago, so it's not like this is some huge aberration. Tbh it seems like a odd metric to use as an indicator, since it seems like more of a reflection of how long ppl are leaving listings up rather than how quickly stuff is selling.

The fact that they didn't go with more straightforward metrics like transaction volume or avg price tells me there's nothing really there, and this is just content marketing built on confirmation bias.

Days on market metrics in the aggregate indicate price trend and demand. The longer a house sits unsold, the greater the evidence it is mispriced, as every property has a clearing price.

30+ days on market and not under contract? Your asking price is too high. Up 60% YoY with the Fed having raised the benchmark rate at the fastest pace in history? The signal shows sellers have not made peace with an asset price level that no longer exists, and the market has exhausted price insensitive buyers.

https://www.opendoor.com/articles/why-days-on-market-matter

This is not "days on market" in aggregate though. This is the percentage of the current listings, which are older than a month. Imagine a very hot market, where almost anything gets snatched the same day. Any listings in such a market that will remain for longer than a day are some overpriced hovels, which nobody wants to buy for any price. So the percentage of the listings that had been "sitting for longer than a month" can be anything in there, depending on how many people wanted to put up their hovel at ridiculous price and the "days on market" can be under 2 days.

Yes this.

Everyone who has no intention of selling their home (in a Georgist manner) could list their house for 5x the going market rate (youd probably sell if and then this metric would be effectively 100% and yet many houses would still sell.

This number is therefore mostly a reflection of a strong selling market since it's encouraging people to list who otherwise might not bother.

> This is not "days on market" in aggregate though.

Exactly - if days on market had told a compelling story they would have led with that. This is content marketing first and foremost, not a scientific study. The process of writing one of these starts with choosing a narrative that will get attention, and metrics are chosen to fit that narrative.

Also to clarify, when I said "there's nothing really there" I meant that the evidence is weak, not that the implication is right or wrong.

Original title "Nearly Two-Thirds of Home Listings Have Been Sitting on the Market Longer Than a Month As Buyers Grapple With High Costs" summarized due to title limit.

"It's not a loss if you don't sell" is harmless for stocks, but has some negative externalities for real estate. REITs (Real Estate Investment Trusts) demonstrate the issue for commercial real estate where in order to lower the rent for a property the newest shareholders have to give up their shares. So instead of lowering the rent and recording a loss, junior shareholders would prefer to own a part of an empty lot hoping a business will come along and start renting.

Having millions of empty houses near millions of homeless people is a direct result of real estate owners trying to maximize the value of their assets. The solution to this would be to find a way to decommoditize housing, but that would never happen because that's socialism. Land value tax may be an easier jump to disincentive this inefficiency.

Proper taxation that penalizes leaving buildings to sit empty and unused would fix this.

People game this by claiming children as owners and/or residents (in the residential space). A land value tax would probably be more motivating to encourage productive use.

"find a way to decommoditize housing, but that would never happen because that's socialism"

Pull that off without creating a powerful and thus corrupt governmental bureau and I think more people would be on board. I suspect that for many the problem is not socialism but George Orwell's animal farm fable about certain implementations.

The problem is that most politicians have real estate investments in one form or another so there is zero incentive for such laws to come into existence.

That's not the only problem...

Awesome, please ship some of them over here to Australia and help solve our housing crisis.

They'll never make it through the Australian immigration detention facilities and get stuck on some random island.

But Nauru is lovely this time of the decade!

There's no housing crisis here, just a systematic destruction of the concept of a house/flat/unit as something that a person owns and lives in, with the active assistance of government, and almost all political parties and independents.

Almost every single person in parliament has multiple investment properties. They will not hurt themselves.

Unfortunately, the reason why they’re sitting on the market is because they are too expensive, not because we have enough houses.

Edit: There are a few reasons why they’re more expensive. There’s the interest rates, then there’s the cost of insurance which is surging in certain places. The market will eventually correct itself but it will take time.

That's easily solved by simply not letting half a million immigrants into the country in one year, but that wouldn't keep the job market flooded with desperate people and the housing bubble inflating for another year.

Update: Someone please explain the downvotes when this is quite literally the root cause of the issue and has been admitted by the Government publicly.

https://www.macrotrends.net/global-metrics/countries/AUS/aus...

  The current net migration rate for Australia in 2024 is 5.155 per 1000 population, a 0.35% decline from 2023.

  The net migration rate for Australia in 2023 was 5.173 per 1000 population, a 4.54% decline from 2022.
    
  The net migration rate for Australia in 2022 was 5.419 per 1000 population, a 4.34% decline from 2021.

  The net migration rate for Australia in 2021 was 5.665 per 1000 population, a 4.16% decline from 2020.

> has been admitted by the Government publicly.

How refreshing of the investment-property-holding legislature to scapegoat immigrants for once!

That's a poor site to quote to say the least.

Try: https://www.abs.gov.au/statistics/people/population/overseas...

and pay heed to Graph 1.1.

Net migration into Australia is now double a decade long prior trend.

Australia has had steady net immigration for quite some time .. that fell in a hole during the pandemic and right now the net intake is much higher than it has ever been - it's the normal intake PLUS the backlog of everybody who didn't come during lock down.

Australia has always coped with a steady level of intake, some 25% of Australian citizens were born overseas, it's not a fear of immigrants that's causing complaint, it's the very recent sudden rise in numbers well over the usual normal.

You're 100% right, but people outside 'straya probably aren't familiar enough with the situation and just see any mention of immigration as a bad thing.

To expand on this: the vast majority of immigration into Australian is legal, the problem was that the government increased the quota numbers massively for various reasons that all boil down to “preserving the wealth of old people at the expense of young Australians”.

I have nothing against immigration per-se, just the recent volume of it.

I suppose the company's emitting the illegal immigrants are suffering a housing surplus?

Good. Prices need to drop to account for the higher interest rates.

This is an expected correction.

I sometimes agree with this theory, however in practice the past few years have shown us that interest rate increases have little effect after all. People were predicting that interest rates would crash the housing market and nothing significant happened.

All of the input costs to new construction go up over time (labor, materials, licenses, services) and new home pricing has an anchoring effect on the existing home market.

Citation:

https://fred.stlouisfed.org/series/MSPUS (review max, then switch to 10yr)

Is there a way to add in another data point with this for new home construction cost to look for correlations?

https://www.youtube.com/watch?v=HSoPXEISUyY

Housing prices are "sticky", which means when demand goes down, prices don't fall quickly - things like this happen initially. Then if it continues, prices eventually drop.

Yes because nobody can get fire insurance anymore. Which is required for a loan. The cal fair solution is 7-8 times the cost of traditional insurance.

> Stale inventory is growing fastest in Texas and Florida

> In Dallas, 63% of listings sat on the market for at least 30 days in June, up from 52% a year earlier, the biggest uptick of all the major U.S. metros. It’s followed by four Florida metros: Tampa, where 70% of homes on the market in June had been listed at least 30 days without going under contract, up from 60%, Fort Lauderdale (77%, up from 68%), Jacksonville (70%, up from 61%) and Orlando (69%, up from 60%).

> There are a few reasons Florida and Texas are seeing the biggest increase in unsold inventory. Those states are building more new homes than other parts of the country, adding to overall home supply at a time when demand is fairly slow due to high housing costs, including skyrocketing insurance and HOA prices. Additionally, some homebuyers who live in Florida–or are thinking about moving to Florida–are having second thoughts due to the increasing prevalence and intensity of climate disasters.

Related: https://www.redfin.com/news/home-purchase-cancellations-june... (“Cold Feet: Buyers Backed Out of Deals at Record Rate in June as Home Prices Hit All-Time High”)

I have relatives in Texas who own a concrete factory and they cannot hire enough drivers to pour the stuff down (they told me that you have to have a special driver's license and drug tests)

We can debate another time whether or not it’s good for real estate, a necessity for life, should also be a financial instrument. Right now in the US, and most other countries, it is.

As long as it is being treated as an investment, that means people can profit from it. It also means people have to sometimes take a loss, maybe even a big one. Investing means accepting risk.

Too much of our laws, policies, and behaviors surrounding real estate seek to remove this risk. How come homeowners and real estate investors get so much help and insurance from government to make sure their investment never goes sour? Why can’t we get that kind of protection on stock market investments?

Yeah, it will probably have big economic consequences if people have to lose money on real estate. Landlords won’t be able to set rent high enough to cover their expenses. Homeowners won’t be able to sell at a price high enough to cover their remaining mortgage. But hey, they invested, they have to be able to lose and suffer the consequences. It will have huge benefits for other people who have money and want homes, as they’ll be able to finally buy low.

The solution to "housing is a heavily artificial financial instrument" is not to make it more chaotic, it is to not make it a financial instrument.

> it is to not make it a financial instrument

How exactly would you do that, considering a home is inherently valuable?

I will not be able to properly argue this point, so I will instead point to the words of who can do it better:

https://www.strongtowns.org/journal/2024/3/4/how-fannie-mae-...

(this one is not about housing but it is the same concept) https://slatestarcodex.com/2015/06/06/against-tulip-subsidie...

> I will not be able to properly argue this point, so I will instead point to the words of who can do it better:

I read the whole blog with an open mind, but it doesn't in any way address how he'd propose making housing not be a valuable asset. It really just reads like a long rant.

Housing is valuable (we all agree, otherwise these discussion about how to acquire it would not happen). How, exactly, could something that is valuable not be wealth?

the problem is not that housing is wealth, but that housing is a financial intrument.

In the current system the housing subsidies are not structured to facilitate buying a house using debt by people that do not have access to enough capital, rather they are designed to be a profitable financial instrument to be repackaged and sold.

One solution for example is to build more cheaper less profitable housing

> the problem is not that housing is wealth, but that housing is a financial intrument.

I agree that a house is a home and should always be seen as a home, it is not a stock certificate.

But perception aside, what would this mean? If something is wealth, how would it not be a financial instrument?

> In the current system the housing subsidies are not structured to facilitate buying a house using debt by people that do not have access to enough capital, rather they are designed to be a profitable financial instrument to be repackaged and sold.

Can you expand on what this means? I know mortgages are repackaged and sold, but a mortgage is not the house.