In 2008, I reduced the time it took me to run a mile by 600%!
My achievement was amazing!!!
…until you account for the fact that I blew out my knee in 2007 and could barely hobble a mile in under 30 minutes (on a good day).
President Biden loves to brag about the “15 million jobs” he created after he took office.
But, he fails to tell us that this was right after 20 million jobs were lost because of COVID lockdowns.
NOTE: It’s a very safe bet that Mr. Trump and every politician would do the same thing.
Housing Inventory Surges to Unprecedented Levels – Unless You Consider Every Year Prior to 2020…
I share the above examples because social media is again swamped with doom and gloom predictions around “surging house inventory!”
Or – “Housing inventory levels are up by 125%!”
Active inventory is indeed way up to almost 1.3 million units at the end of May.
But those “terrifying” increases are off all-time record lows in 2022 and 2023!
Average inventory levels are in the 2 million range, as indicated by the chart below, and we are not even close to that level.
So, additional increases in inventory should be welcomed.
Housing analyst Logan Mohtashami is the one who illuminates the correct perspective over and over.
More importantly, Logan frequently shares the chart at the bottom of this blog which shows inventory numbers since the early 1980s – and we are WAY BELOW trend (please see the chart).
Logan additionally pointed out that “This is all happening with the 3rd Calendar Year of the lowest home sales ever” So, additional inventory should be welcome.
New Builds Are a Drop in the Bucket
Another data point that gets abused, per Mr. Mohtashami, is the increasing number of new homes on the market by builders, but that number too is minuscule (about 100,000) compared to the total number of listings on the market.
Even at the peak of the pre-2008 meltdown, we only saw about 200,000 new homes for sale, relative to a whopping 4 million total listings.
Also interesting is real estate investor Grant Cardone’s perspective, as he says there are huge institutional investors waiting to swoop in to snap up homes as soon as prices correct even a little – which will push prices right back up.
Equally interesting is the fact that institutional investors still see housing as an excellent long-term investment.
Median Home Prices Are Very Misleading Too
Last but not least, I want to touch on the median home price again because it too is so misleading.
The median home price increased by 3% from last month, so woohoo, right? NO! The MBS Highway pointed out today that it is primarily because of a higher percentage of more expensive homes sold.
I love the integrity of the MBS Highway too because they are huge housing bulls and they could have easily used the data to support their case for a strong housing market.
But, when the median home price changes because of the composition of the homes in the data sample and not because the market overall is appreciating (or depreciating), the median home sales number is very misleading.
I blogged about misleading median home price data several times including here: Putting the “Median Home Price” Nonsense to Bed – Once and For All.
In that blog, I explained how JVM’s median pizza price plummeted when we started to order medium pizzas instead of large, and we panicked!
