Housing market analysis & maximizing sale price

[Lucky C]

Who out there provides the most rational and in depth analysis of the US housing market, with free commentary published on a regular basis?

I have some doctorhousingbubble.com articles to catch up on, but that site is pretty much Zero Hedge type "the system is broken" negative rhetoric without the serious market analysis that I'd be interested in learning about. I imagine there must be someone out there looking at relevant data like expected mortgage rates, new housing developments, demographic shifts, wage growth, etc. and produces a decent model showing where prices might be heading this year? I imagine that would be more reliable than trying to predict stock returns, but maybe that is too much to ask for?

I would also be interested in the strategy of how to maximize what you can get for your house. Realtor fees, timing of the listing, setting an asking price, etc. A lot of this may seem like common sense but getting the details right could certainly make a five-figure difference in sale price. It's very easy to find "for dummies" resources on this topic but I'm interested in knowing whose writing I should seek out for something smarter.

[bostonimproper]

My mother is a real estate agent (about 20 years experience), and what I’ve learned from her about maximizing sales price is:
- sell in the spring (Feb/March)
- slightly underprice listing to generate interest and get competing offers (in a hot market)
- stage your home nicely, taking out everything that is not big furniture pieces (get rid of the all the clutter)
- minor landscaping and fresh paint are your friends
- when comparing offers, cash and no-contingency offers are king and edge out sales price (offers falling through are bad)

Are you trying to sell a home? If I were in the market now, I would consider getting an iBuyer offer so you have a minimum threshold. At that point you can check out comps yourself and decide if you want to sell the regular way.

[Lucky C]

Thanks, great tips. I'm contemplating selling at these high prices and going back to renting but I'm on the fence at this point. If I had high confidence that double digit home price increases will continue for another several years then that would make me lean toward holding on for a while. Looking back at 2006 there was a decent amount of time to act between home price acceleration slowing, topping out, then falling, but of course that is only a sample size of one, plus in some hot markets the crash came more quickly. I know nobody can predict price trajectories precisely but if I could get a feel for a probable range over the next year that would help with my decision. I would most likely not want to sell this year but would want to be ready to sell next spring.

Any insight as to typical spread between an iBuyer minimum threshold and a Realtor who puts in the effort to get the best offer?

[Ego]

Have you considered OpenDoor?

https://theoperator.substack.com/p/open ... ce=url&s=r

[bostonimproper]

My rough estimate is that the delta is about 5-10% between an iBuyer and good real estate agent. Though sometimes iBuyers overpay too. YMMV. It’ll tell you the ballpark though. If you do sell but not to an iBuyer I’d go with an agent— lots of potential pitfalls in FSBO and you need to pay out buyer agent fees anyways to be competitive.

My two cents is that the narrative of a coming big crash in real estate prices is somewhat overblown. Lending standards nowadays are a lot tighter than they were in 2008. Also new construction is knee capped right now due to supply chains. Not to mention limited new inventory to begin with if you’re talking about the Northeast.

IIRC, you’re in Boston metro? You may not see lots of price appreciation as rates go up, but I doubt you’ll see a big dip. Also, I expect rents to keep rising, fast. In T-accessible regions it’s coming back hard after a pandemic slump.

If it’s a pure financial play, I personally would not sell. I mostly pay attention to the more central towns though, since that’s where I live. Further out, maybe the market’s getting softer— hard for me to say.

Just my two cents.

[Western Red Cedar]

Who out there provides the most rational and in depth analysis of the US housing market, with free commentary published on a regular basis?

I have some doctorhousingbubble.com articles to catch up on, but that site is pretty much Zero Hedge type "the system is broken" negative rhetoric without the serious market analysis that I'd be interested in learning about. I imagine there must be someone out there looking at relevant data like expected mortgage rates, new housing developments, demographic shifts, wage growth, etc. and produces a decent model showing where prices might be heading this year? I imagine that would be more reliable than trying to predict stock returns, but maybe that is too much to ask for?

You might be looking for something more detailed, but the Joint Center for Housing Studies at Harvard publishes an annual report on the State of the Nation's Housing that covers much of what you are talking about. There are often some pretty interesting keynote speeches and video discussions that accompany the release. You can dig into some of the links or cited sources if you want to learn more about a specific part of the research:

https://www.jchs.harvard.edu/research-a ... conditions

I keep tabs on housing policy coverage from some think tanks such as the Lincoln Institute of Land Policy or the Brookings Institution, but I know others cover this as well.

I think the challenge is finding something specific to your region or metropolitan area. For that, I'd check into local universities with programs on housing, real estate, planning, or public policy. You can also find some good analysis on state or local government webpages that work on these issues - depending on where you live. Housing is a major emphasis in public policy across the US right now, so I've seen pretty detailed research at various levels of the public sector in a number of communities.

[Lucky C]

Yeah Western Red Cedar that looks great!

Thanks Ego, I am not familiar with all the iBuyers out there. I'm skeptical because I made a lot of improvements and there are some nice quirks to the house, so I would think in person showings the old fashioned way would get me the best price even with the high fees Realtors charge.


I went from Boston metro renting to buying cash in the Providence metro area. Right now I am leaning towards going back to renting closer to Boston, with non-financial reasons being most important, but potential double digit percentage swings in prices (positive or negative) are still important to consider.

Yes, rents are increasing, but home prices have been increasing faster. Maybe this will start to flip this year. The Case Shiller continues it's sharp march upward, but is starting to decelerate a bit for the Boston area (still growing at double digit percentages). If price growth declined to zero from now until next spring, that would be an unprecedented slowdown (a bit faster than 2006) and it would still mean prices are appreciating up until that point. So based on the (sample size of 1) previous housing bubble I would expect prices to be higher than today over the next 1-2 years. Beyond that probably wouldn't be relevant to me since I would want to move within that amount of time or not at all. So I will be keeping an eye on the market but I shouldn't worry about a crash this year.

If all goes well, as I continue the high income career path beyond what is needed for FI, if I end up wanting to be a homeowner again, house prices should become a smaller percent of net worth.

[Lemur]

Just a general question but in weighing your decision is it boiling down to this?

Sale of your home (with all the associated turnover costs in doing so) minus taxes plus invest those moneys in the stock market is > than rent + projected increases?

I'm assuming you would do some sort of net present value calculation on both sides of this equation...been a while since I've done any financial math beyond my stocks and SWR calculations.

[Gilberto de Piento]

Zillow.com/research has a lot of content. See the tabs at the top of the page for different types of reports.

[Western Red Cedar]

The Harvard research will cover many of the macroeconomic and demographics trends you are interested in. Zillow will provide more relevant data on price trends for specific regions. Those two will probably give you a pretty good foundation to move forward.

It is surprisingly difficult to find objective data on market analyses. IMO, this is partially because much of it is funded by the real estate industry, and "it is always a great time to buy"

[chenda]

"it is always a great time to buy"

And sell

[Slevin]

I don't think it's objective data by any means; but I receive an email from my last realtor that just local shows housing stats and their comparisons to one year before (which can then be referenced again versus the equivalent post from 2020). For my area, there was a 67% decrease of available houses (33% available) listed in 2021 vs 2020, and a 58% decrease in available houses (42% available) from 2021 to 2022, meaning that compared to 2020, there is 13% of the amount of listings on the market compared to 2020, with a (1.27*1.16) -> 47% increase in average sales cost (not necessarily representative of house values going up 47%, as that is just a rolling average and likely more expensive houses have sold recently, but they definitely went up at least 20-25 %).

Maybe some local realty offices might have some aggregate data available for you if you email them as a potential client?

[Lucky C]

I have found that there is a strong correlation between the change in housing inventory over the past year and the change in home values over the next year. However this is with curve fitting just five years of data so take it with a grain of salt. If the relationship continues, this implies:

- The change in inventories is a leading indicator for home values with a significant lead time - much more useful than a coincident indicator!

- The continuing sharp decline in inventories implies a double digit increase (10-15%) in home prices continuing at least through this home buying season.

- Very roughly estimating (again based on this very limited data set & perhaps over fitting the data), inventories would have to increase year over year for home value growth to lag inflation. It may be possible that inventories could still be close to record low levels, but as long as they are not as bad as the previous year's inventories, don't bank on the double digit price growth to continue.

Inventory typically bottoms in Jan-Feb each year in a healthy housing market. Covid caused inventory to continue its decline through 2020 (inventory peak was in Apr 2020). In 2021, the inventory bottom was in April, after which the rise in inventory through the season looked fairly typical, but now inventory over the winter has been crashing to new lows. I'll be keeping an eye on whether the inventory high this year (late summer or early fall) will be a lower high vs. last year or if it's stabilizing. If it runs up to higher levels than in 2021, I would expect 2023 to be a decent time to sell, if downsizing, moving to a lower CoL area, or switching to renting.