Anyone stupid enough to have bought into the Fed’s insane Housing Bubble 2.0 over the past two years is going to get their head handed to them when it all comes crashing down. Got popcorn?
Pent-up supply suddenly shows up – those vacant homes that no one was counting as vacant.
For the last two years, the story was that there’s no inventory for sale, that there was a housing shortage, and that’s why prices were skyrocketing. Then there were other folks like me that pointed out over and over again that people weren’t putting their old homes on the market after they’d bought a new home, and that these people now owned two or three homes and that they were going to ride up the hottest real estate market ever where prices soared 20% or 30% or more per year, and then they’d sell those vacant homes which no one had ever counted as vacant.
And because they already lived in a home, they could sell their vacant homes without having to buy another home. This is the “shadow inventory” that is now coming on the market, just when mortgage rates have spiked, and sales are plunging. And to get things moving, price reductions are spiking.