What the Hell is Actually Going on with Housing??

Is the housing market starting to slow down? At least a little bit? I’m having a tough time understanding what is actually going on.

The Market is Cooling, right?

To give you an example of why I’m confused, let’s take a quick look at Redfin. During my most recent site visit, I read an article here that posited the market is beginning to cool.

Both pending sales and asking prices began to decline or flatten in the four weeks ending May 30. It’s too soon to tell if these are early seasonal changes or the start of the post-pandemic cooldown we predicted earlier this year.

It also goes on to list all of the indicators that would suggest a cooling market.

  • Pending home sales fell 3% from the four-week period ending May 2, compared to a 2% increase over the same period in 2019. Compared to 2020, they are up 38%.
  • Asking prices fell $2,500 from the four-week period ending May 23 to a median of $354,975, up 11% from the same period in 2020.
  • New listings of homes for sale were down 8% from the same period in 2019, and are down 5% from the 2021 high, which was set during the four-week period ending May 2. During the same period in 2019, new listings fell 2%.
  • Active listings (the number of homes listed for sale at any point during the period) fell 37% from the same period in 2020.
  • For the week ending May 28, Mortgage purchase applications decreased 3% week over week (seasonally adjusted). For the week ending June 3, 30-year mortgage rates rose slightly to 2.99%.

The Market is Permanently F$%&ed, Right?

Ok, so those are all indicators that the market is starting to cool, but then I watched a video of the Redfin CEO about his Tweetstorm that the market has irrevocably changed for the worse. Per the post I did yesterday, Cultural Husbandry thinks the situation is so bad that America will become violent as a consequence of the housing market(see the rest of his Twitter here).


All this leaves me wondering what the hell is going on? Is the market going to keep cooling with increased but reasonable asset prices, or is it a bubble that is going to pop? Is this a serious threat to America’s economic freedom?

That last take seems a little bit extreme, but it’s what news media is saying. Another thing I don’t totally have a read on is how sensationalist news outlets are being with their reports on the housing market. Similar to the Redfin CEO, The Hill, a news channel I thoroughly enjoy, recently did a similar segment on Wall Street’s grip on the housing market(see the video here).

They basically contend that the “Great Reset” is already well underway and housing is going to be primarily owned by financial institutions. Once that happens, average Americans will never be able to own homes and take part in that form of wealth creation. Again it is an alarmist take. One that I expect a news station to espouse. But, there has to be a scary amount of truth to it, no? I mean just look around. The housing market seems unsustainably hot.

Does Anyone Know What is Actually Going On? Anyone?

Then again, my finance friends say there is nothing to worry about. Maybe that’s because they’re on the buy-side and are #winning. Maybe it’s because all of this housing talk is overblown and we’re going to see a reasonable cooling.

Does anyone know? What do all of you think is going to happen to the housing market? Should I, a lowly Millennial, be fighting tooth and nail to go into 7 figures of debt to own right now, or will it all be alright like it was for the Boomers? Let me know what you think in the comments!


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Pedro Robinson

Pedro Robinson

I grew up on the Stanford campus, where my Dad worked and still does. I went to Dartmouth College where I majored in Classical Studies, walked onto the football team for 2 years. After Dartmouth, I went to Palantir Technologies, where I did operations and strategy work for 3.5 years. From there, I went to ITAM startup where I did business development for a year. Wanting to get back into writing, I started free lance writing for some tech startups, at which point I met Rob. Since then, I have been helping him out with his content production and creation.

6 thoughts on “What the Hell is Actually Going on with Housing??”

  1. Last Summer’s riots incited a nationwide flight to safety, made possible by work-from-home technology. I’ve been writing abut this for a year now. No one else in the real estate media will tell the truth, even though the exodus is obvious.

    Quoting from the link ( http://www.bloodhoundrealty.com/BloodhoundBlog/18043/overnight-news-if-you-cannot-possibly-admit-that-the-ants-are-fleeing-the-grasshoppers-what-do-you-call-the-last-year-the-great-reshuffling/ ):

    What should you expect? More of the same, very likely:

    • Rioted cities will continue to bleed their remote-work-capable Ants.

    • Inventories in target cities will tighten even more, since effectively ZERO current homeowners will elect to sell into this maelstrom.

    • The real estate press, most especially the PR operations at Zillow and Redfin, will continue to obscure the devastation in the abandoned neighborhoods of the rioted cities.

    This is me in February, telling the actual truth about “The Great Reshuffling” before the lie had even been cooked up:

    “I can’t defend that claim because it is not being documented by the real estate press, but it will turn out that rioted cities will have lost population to non-rioted cities, that more-suburban areas in rioted cities will have gained where more-urban areas will have lost, and that, generally, people will have moved from D- and C-quality housing to B- and A-rated domiciles – leaving many empty former-residences behind them.”

  2. Pedro, I think Gregg gave you a topic to research 🙂

    ““I can’t defend that claim because it is not being documented by the real estate press, but it will turn out that rioted cities will have lost population to non-rioted cities, that more-suburban areas in rioted cities will have gained where more-urban areas will have lost.”

    There has to be data on interstate or even intra-state migration somewhere. Let’s pick three riot-torn cities: Portland, Minneapolis, and Seattle. Then look at population changes from start of 2020 to today.

  3. You should research the rest of the quote as well. The big-news is the ultimate vacancy, a nation of New Detroits. Everything you quoted is already well-documented, sub rosa, by Redfin. They like to lie about the intra-city moves, especially; I inkle they might be defending their own home values. From what I have seen, only apartment vacancies in rioted cities are being admitted so far, and multi-family housing in general may bear the brunt of the vacancies. Detached housing on fee-simple dirt has no competitors by now, in any case.


    Vertical office space in rioted cities will also have gone to hell, probably never to recover. No one will leap at the chance to return to work in a building now surrounded by vagrants. The nation’s richest people own those buildings, so the taxpayers will in due course discover an urgent need to acquire them at full price.

    As mentioned in another post on the same topic, currency inflation will be pushing listed prices higher even in rioted cities; the delta between the fled-from and fled-to locations is the news.


    Pedro, my apologies to you: You asked about Blackstone and I told you the news every other real estate story is intended to camouflage: Aesop’s Grasshoppers need the Ants (the point of the story), but the Ants do not need the Grasshoppers. Ants who can are fleeing the Grasshoppers forever, creating the ongoing feeding frenzy – and leaving unreported devastation behind them.

    Regarding Blackstone: Second, the value of fee-simple housing is created by the ownership; no motivation, no added-value. But first: Dirt is cheap, there’s plenty of it, and the residential real estate market for working-from-home Ants is now not just national but global. You can’t put a corner on silver.


    Nota bene: Market “cooling” is hyperlocal for all of the foregoing reasons. Nothing is cooling where I work.

    I throw off Ph.D.-bait daily. Feel free to check anything I say.

  4. Pedro,

    Wow that’s a big question….I’ll guess.

    The business first: If we are really headed towards sustained institutional buying the current models will need shaking up. Service providers covering Blackrock will be different than those handling Main Street. That’s a big deal. https://www.investopedia.com/ask/answers/06/institutionalinvestor.asp

    Ah, the market.

    IMO, the simplest answer is we are seeing a “flight to quality”. Hard assets are the standard go-to investments when the environment is in duress. Stocks, bonds, real estate, commodities seem to be the destination for real or perceived security. Hence the drift towards housing.

    Because of the violent shift in confidence this “flight to quality” caused panic buying creating big price gaps that likely will come back around to be filled.

    So, we have these two things converging. Big money buyers (institutions) looking to benefit from a less robust middle class and a fear of missing out on the retail side (consumer).

    My fear? Today it’s all about buying. Who is buying, how much….and where? No one is talking about the sellers. Markets are two-sided.

    I learned as small time bookie in college that if everyone was betting on the same team most of the time the winning bet was on the other side.

    We’ll see.


  5. It is going to be tough to own a home for the typical first-time buyer for several years. Right now, there is so little supply that prices are escalating, pricing them out. That means they cannot take advantage of the low rates. Rates will go up this next year. I don’t think the home prices will fall enough to compensate for the increase in rates, pricing them out again. My belief is the market is cooling, that level of appreciation is unsustainable.
    In Utah, many are taking their equity and moving to smaller states with a lower cost of living. I’ve never heard that in my 25 years in the biz. They feel like those lucky Californians that used to move here to do that. The other side is most parents worry if their kids will ever be able to own a home.
    The haves and have nots are extreme and will continue to increase if we don’t regain some balance in the market. That is never good for any community. I wish I had the answers!


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