underwater home
One of the most significant changes in the housing market since the housing crash has been the dramatic decline in underwater homes. During the housing bust from 2008 to 2011, foreclosures surged due to a lack of equity sales, which also profoundly affected demand for homes. Today, the situation has improved significantly. Consider this: Q4 2010, 23.1% houses were flooded. By 2024, this number will drop significantly to 1.8%the lowest level ever. The chart below represents data for the first quarter of 2024.
So not only do we have a very limited number of underwater homes, but homeowners also have a lot of equity for sale. The reason this is so important is because when we get back into a jobless recession, many families in America will have a cushion to sell their homes without going into foreclosure at all. The second positive is that homeowners who are not out of work can sell their home and use that equity as a down payment on another home or even pay cash for their next purchase.
Days on market
One of the problems with so many foreclosures and lack of demand in 2011 is that it took more than 100 days to close a deal — a sign of an unhealthy housing market. this National Association of Realtors Tracking days on market, the latest existing home sales report shows only 24 days on market this year, unlike 2011 which lasted more than three months.
In 2011, we have exceeded 3 million The number of active listings at the beginning of the year, and the total number of active listings on NAR today is 1,128,000. Traditionally, I like to have between 30 and 45 days on market throughout the year. But with active listings so low right now, even with another low home sales year in 2024, days on market is still under 30 days, meaning homes priced right are selling quickly.
new listings
The most significant and obvious difference between 2011 and 2024 is the weekly new listings data during the peak season. This is probably the second largest gap ever. Only 2023 will be lower than this year.
The last week of 2011, 396,955 Homes go on the market without a contract. For the same week this year, the number was 70,606 new list. New listings in 2023 were the lowest, and 2024 appears to be the second-lowest ever.
The context of this difference in new listings is important. We had a massive credit bubble burst starting in 2005 and lasting from 2006 to 2008, all before the 2008 jobless recession began. It was falling apart, which is why we had so many new listings at the time. Now that’s not the case – I drew these black lines to make my point.
Of course, it wasn’t just 2011 that saw an explosion of new listings: from 2009 to 2012, new listings ranged from 250,000 to 400,000. every week, And over the past four years, our run rate has been about 30,000 to 90,000 times a week.
New listing data last week over the years:
- Year 2009: 281,734
- year 2010: 345,146
- year 2011: 396,955
- 2012: 318,041
What a difference a cycle makes!
Now, I could write out about 16 different variables that would make 2024 very different from 2011, but let’s keep it simple. The housing market is challenging in some respects, but we won’t have another 2008.
