re: Wall Street: Housing market to see 2nd biggest home price decline since Great Depression

quote:

---

I do know that right now we are in the 1st inning of the default market and I'm hearing by 2024 around the housing inventory will consist of around 20-30% of foreclosed properties. Don't get crazy though with that number as we are going to continue to have an inventory shortage because most people who locked in their homes and their investment properties with 2-4% mortgage loans are going to hold on to their properties so we will continue to have a tight supply going forward in most markets across the US. The supply will just consist of 20-30% of the foreclosed properties

---

I agree that people with a home that they can afford aren't eager to move unless they have a life changing event (divorce, job move, job loss, financial event).

But I find myself becoming more and more skeptical about the housing shortage narrative the NAR has been pushing.

They seem to ignore a bunch of obvious problems with the shortage argument such as:
1. home ownership rates are around 65% which is pretty typical historically (not consistent with the belief that an unusual shortage exists)
2. a lot of people (including baby boomers who will die over the next 10 years) own more than one home - second and third homes are financial weights to be sold when the economy degrades or life events happen;
3. investor ownership tends to boom with increasing prices but can reverse into extra supply when private and corporate investors start going underwater - if lots of renters stop paying or being able to afford the rent many investors will make a purely financial decision to sell;
4. apartments, condos, and other rentals are alternatives to housing and have been overbuilt recently;
5. foreclosures haven't started and that will be more supply at the wrong time when prices are being forced downwards.

I don't think housing prices fall off a cliff in most places (outside of stuff like California, Austin, Boise, Phoenix, and Florida) but I think there are a bunch of reasons value has to decrease over the next few years