Zillow projects that U.S. home prices will fall 1.7% between March 2025 and March 2026. Last month, Zillow economists still thought prices would rise this year.
The US Housing bubble has popped.
Everyone remembers how well that went last time, right?
Don’t be thinking this means housing is about to get more affordable.
It means borrowing is about to get a whole lot more expensive.
I remember a year or two before the 2008 crash watching a video someone had made where the housing market was modeled as a roller-coaster that you got to ride on, and toward the end it was just going up and up and up until it was miles above where it had been. And the comments were like ‘It’s gotta come down sometime, right? It can’t keep going like this?’ Yeah, they were off on their timing, but not about the prediction in general. As soon as we started seeing articles about the high cost of living and the housing crises in cities around the country and even world I started thinking about that roller-coaster again.
I remember that one and seeing it at about that same point in time. It was very impactful.
However…
Indeed. I mean I certainly didn’t believe them, but I didn’t know shit about the housing market in like 2006 or w/e. Boy did that change. Now the Big Short is one of my favorite movies.
That’s close, but the one I saw didn’t have post-2008 data (14 years ago was 2011.) The one I saw was definitely pre-2008, and also I think it was a steel coaster not a wooden one, but that was a long time ago.
1.7% YOY decrease is a bubble popping?
The housing market almost never goes down year-over-year, so it’s reasonable to assume that when it starts to it signals big trouble in the future.
The housing market almost never goes down year-over-year
https://en.wikipedia.org/wiki/Case–Shiller_index
Case–Shiller home price index data, inflation adjusted, 1890–2018.
He probably meant that it almost never goes down in nominal, ie, non inflation adjusted terms, yoy.
What you have posted is:
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Not actual nominal prices, it is the case-schiller index, which is calculated with different weighting and methods than Zillow is using.
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This is inflation adjusted, real values, again, not nominal prices.
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Looks like this is a data point at each month, when we are talking about blocking out and aggregating entire years and representing them as one data point.
When looking at more granular data, you’re more likely to see more movement. When you’re looking at less granular data… a projected yoy decline is a much bigger deal.
Thats a lot of words to say: You are not doing an apples to apples comparison.
That would look like this:
Apologies for whipping up this shit tier graph from FRED, im on a shitty phone.
Orange or Rust is actual nominal prices, blocked out year by year.
Blue is the nominal change in yearly prices, I would have liked to made it a centered % change graph in the middle, but FRED doesnt do that in its web renderer.
But you can still see any time the blue is… below zero.
And that is, historically, pretty rare, only happening in 7 (or 8?) years of nearly a century of data.
Yeah, I suppose that’s fair. He was specifically using it in the context of illustrating whether-or-not this figure was bad or not.
I just have a knee-jerk irritation reaction when I see people saying “the housing market always goes up”, because it’s usually in conjunction with someone advising someone to put a ton of money into real estate, where the graph I provided is a more-relevant one.
Glad you agree!
=)
Also I just realized we both assumed Libra is a he.
Whoops!
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The housing market almost doubled prices during COVID. I don’t think it’s unexpected that prices would settle down and readjust in the years following.
Except it is unexpected, if you ask basically 90% of realtors, and the vast majority of analysts following the housing market, untill… well basically right now.
The whole schtick is that houses prices always go up, never down, that price growth may slow but never actually go negative.
I pointed this out to my other reply to you, but uh yeah, the fundamentals have been blaring more and more warning signs for years, but perception is key, so the vast majority of people who report market projections are incentivized to paint a far too rosy picture…
… And then reality becomes too difficult to ignore, and perceptions shift rapidly.
Zillow, a month ago, was projecting a modest, nationwide growth of 0.8%.
Now, a month later, Trump actually does the stuff he repeatedly said he was going to do, but the market just assumed he was either bullshitting or had a more robust and thought out plan…
And suddenly the delusions are eviscerated, and a month later, 0.8% gets moved downward -2.5% to a -1.7% projection.
These people did not see this coming until it smacked them in the face.
Almost no one was projecting an actual decline, publically, untill very recently, and if you were projecting a decline 6 months ago, you would have either been dismissed or laughed at by the experts.
Yes.
The bubble pops when the price growth stops, and goes negative.
‘The bubble’ is basically the idea that prices just keep going up forever.
Based on that idea, financing, loans, leverage happens.
When the fundamentals no longer represent the bubble mindset, everyone whose personal budgets or business relies on prices just going upward, forever, are now margin squeezed, and potentially margin called depending on how overleveraged they are… because you based your ability to pay the debt on your loans you used to purchase the property… on the idea that your property and thus rent prices would just keep going up.
Now, your property is actually worth less, and thus so is the amount of rent you can charge… but your debt payments are still the same.
You hold out as long as you can, but all around you other property owners are cutting their losses and selling at lower property values, which further reinforces the idea that your own property isn’t worth the rent you are charging for it.
EDIT:
There are a lot of underlying fundamentals that drove Zillow’s projection, which are broadly addressed in the article.
But it is also worth mentioning that a single month ago, Zillow was projecting a modest 0.8% growth for the year forward.
Then Trump decided to greatly aggrevate the economic situation, and things downturned so fast that 0.8% growth turned into -1.7%.
The fundamentals have been building up to a breaking point for a while now, huge inventory numbers, much more time on market till a sale, sellers offering many kinds of concessions, significant lossess in the stock prices of major homebuildets…
But then Trump did the Tariff nonsense, and also decided to deport all the brown people to a gulag, cause an overt constitutional crisis, and destroy the USD as the de facto world currency… and in doing all thjs, he essentially popped the bubble himself.
Trumps actions in one month shifted the growth projections for a whole year by -2.5%.
You wish. As long as housing is seen as an investment, there will be enough people buying to keep the prices going up.
Its not me doing the wishing or future predicting here.
It is Zillow.
They have the largest, most comprehensive, and most frequently updated database of information on US home prices… basically, in existence.
They are saying you are wrong.
Not me.
Worth noting that the -1.7% figure is … nationwide, amalgamated.
There will be areas that keep appreciating, areas that stay flat… but many, many more areas that will depreciate.
I live in a ski town, which is a second home market. Houses are surging onto the market right now as people are wanting their capital liquid, and prices are softening quickly as people get desperate to offload these rental houses when absolutely no one wants to buy at the moment. Our vacation rental market reached peak saturation a year or so ago, and now it’s a losing battle for many, especially considering we had two bunk winters in a row and owners lost their asses.
I don’t expect houses to return anywhere near where they were before COVID, but I’m optimistic they’ll become semi affordable in the next year or two. I’m just tired of renting and facing the prospect of moving because a landlord gets a wild hair up their ass.
Not the people being deported, or the people who work for a living whose savings are going to get devastated…
I’m constantly pestered by flippers mailing me their postcards offering me “all cash, as-is” deals to buy my house for 20% under assessed value. Medium-sized PNW city that’s seen a ton of appreciation due to 1) being relatively cheap to begin with, 2) having an airport w/OK connections to major coastal and SW cities, and 3) being perceived by outsiders as not having “big city problems” (very wrong). I wish these flippers would die, but if that won’t happen I wonder if bubble-popping will significantly hurt their ability to prey on the desperate?
Going out on a limb here, but I’m guessing you are describing either Bellingham or Everett (or their sort of… basically attached, suburb cities)… in which case, my condolences, I’ve lived in both rofl.
I hear Tacoma finally stopped smelling like farts all the time somewhat recently…
But yeah, all the ‘medium sized’ PNW cities are absurdly overpriced now.
I ended up getting assaulted and seriously injurrd… and am living off of SSDI while recovering… many states away, where a person can actually rent a place off of disability alone.
Spokane (or, as I call it, Spokanistan). I once lived in Seattle and liked to visit B-ham with its hippies and WWU and proximity to civilization (B.C.). But it was always WAY too expensive, even back in the 90s. I considered Tacoma and that probably would have been the smart move - Old Town is pretty cool and I don’t think I’ve noticed the Aroma of Tacoma since the 90s. I lived in Tumwater for a year and Oly still has a certain charm - pretty leftie and so very close to the Olympics and all that wilderness and of course the ocean.
All those S. Sound cities have gotten crazy expensive but not as bad as Seattle and north as far as I can tell. I can kind of understand it - people getting pushed out of Seattle by gentrification but who can still find a job and afford an apartment or maybe even a house a bit further south.
I hadn’t heard that north of Seattle had gone to hell and I’ve got to wonder how the dumbass tariff stuff is going to hurt Boeing manufacturing in Everett and hurt their local suppliers (if any) too. I doubt it will be enough to cause an outright crash there - the demand always seemed to be, uh, “organic” rather than speculation, but it’s been a long time and I’m out of touch with that region.
Spokane is a cultural void for the most part, but politically it’s surprisingly purple and getting more so. The job scene, except perhaps for medical, simply blows. What’s inflated RE prices here seems to be people coming in from out of state who don’t need a job or who work remotely, and who have some kind of fantasies about “getting away from it all”. And of course the speculators and second-home buyers and developers. The skies here are full of corpo jets coming and going from Sandpoint (resorts) and CdA (resorts) and western MT (resorts) from Seattle and CA and the Southwest … wouldn’t break my heart to hear that their occupants’ RE portfolios have tanked one day.
Sorry to hear about your assault. I’d be super freaked out to have to depend on Social Security <anything> with this regime in power.
Ah, my west side bias is showing, oops.
I’ve travelled over the Cascades many times, but only really spent basically vacations or weekend trips actually out in Spokane or the Tri Cities.
Tacoma is where a bunch of the hipsters I knew went in the early to mid 2010s… but now it has largely … gentrified, and also crime and drug addiction and homelessness is now much more visible.
After I got assaulted, I ended up homeless untill the SSDI kicked in, a good part of that in Tacoma, and jesus fucking christ fentanyl addicts are basically fucking zombies, nearly got killed by a few.
But yeah, basically all of WA is just… way way way too fucking expensive to live in, unless you, individually, make at least 6 figures… and the job market for getting that kind of job is pulling in candidates from literally the entire world, competition is insane, nepotism abounds, basically all tech work treats you like or literally as a contract worker unless you have massive connections or got grandfathered in a decade or more ago.
Also Boeing is definitely gonna get fucking wrecked from retaliatory tariffs… there was already a story in the last 24 hours of a Chinese airline returning a recently delivered 737 Max because the Chinese ret. tariffs applied to it.
Just fucking flew it back to Boeing Field even after their local plant in China had just finished putting the Chinese airline’s livery on it, fuck it, nope, return it, too expensive.
It doesn’t matter how progressive WA is generally… untill it gets a state income tax, it’ll be a playground for corpos and rainbow capitalism.
My current plan is to … well, hope to god that my SSDI doesn’t get massively curtailed or cancelled, keep doing physical therapy and living off of soup and trail mix untill I’ve built up some savings (all my fucking cards got stolen, years later i am still trying to convince all the credit agencies that I am me and 90% of the rung up CC debt was not me)… and then move on up to Minnesota.
Minneapolis/St.Paul is roughly the same population as … the actual population that lives in Seattle, and just generally, way more affordable, not as solid blue, but decently so… and the risks from accelerating climate change are actually significantly lower than most of WA.
They’ve got more effective state based rental … basically tax relief for low income people, you get a subsidy each tax year cycle that offsets some of your rental costs, SNAP (if it still exists) will go further…
… and their apartments actually have heating and AC, unlike a large chunk of PNW apartments… that fucking heat dome a few years back nearly killed me.
3 days, 72 hours straight of no less than 90 degrees indoors, up to 105, even with space blankets and then blackout curtains to try to keep the sun out… had to just keep taking cold showers… and I still ended up sweating out nearly 10 pounds.
Anyway, if I can get to the point I am not in constant pain, I am just gonna try my hand at making my own videogame, solo.
If it works out as a decent revenue stream, hurray! If not? Don’t really care, I got absolutely chewed up and abused by the corpo data analyst jobs I worked, I’d rather firebomb their offices than go back to a similar job, I would literally rather be impoverished and at least mentally sound than have to deal with the hyper gaslighting corpo tech culture anymore.
I’ve got neighbs with their adult, autistic offspring living with them. The “kids” are 100% supported by SSDI+parents. When RFK comes up with an excuse for cutting their SSDI, they’re all f-cked. They’re renters, and have lucked into a much-lower-than-market rent (the owner is some weirdo who doesn’t pay much attention to the house or to the rental business and has not raised rents for a long time), but I don’t know that they can afford it all w/o the SSDI support for the “kids”. Also, the mother works for the state and is in the kind of job that the DOGE/Project-2025 scumbags would just LOVE to cut. If any of this comes to pass I can easily imagine them being at risk for ending up on the streets.
But on the bright side, thanks to Orange Diaper and president Felon, the landlord could then sell the house at some substantial multiple of what he paid for it back in the day.
Yeah I heard about the Chinese saying “take your damn plane back” to Boeing. If only there was Some Other manufacturer of well-made, sophisticated passenger aircraft somewhere in the world. Maybe in Europe or Brazil? A manufacturer that foreign airlines could buy from without having to pay US tariffs? If those foreign airlines find that manufacturer …welp, lots of layoffs in Seattle and Everett and S. Carolina. With that, and all the professional-class government and tech layoffs, and the resulting personal bankruptcies, and mortgage delinquencies and rental eviction/vacancies, Zillow might just have a point here.
Re: tech, I hear you, tech culture sucks and has sucked for at least the past 20 yrs. I’ve only been in small companies/startups and consulting though, never megacorps. It’s mindblowing to me that even after all the tech layoffs in SV and elsewhere, and all the RTO chain-yanking, techies still refuse to recognize themselves as the blue-collar salarymen that they are. Entirely disposable, and if you step out of line there’s someone or something (AI) to take your place.
It sounds like you might have a viable riches-to-rags story to write! Something like this: https://www.esquire.com/news-politics/a62875397/homelessness-in-america/ (everyone should read - it’s a great essay) . Podcast interview with the guy: https://youtu.be/Oq8ulw5yEuw?t=95 . But good luck w/the project if you’d rather write software. MN sounds like a good Plan B (to the PNW). Had a GF from there once, and thanks to her influence I still issue the occasional “uff-da”.
… Yeah…
Ironically, the last job I had… before becoming homeless…
Was the Co-Lead of the Data Team… for Mary’s Place, the largest non profit network of shelters and other programs … assisting the homeless… in and near Seattle.
About 24hrs after the assault that crippled me, I dragged myself into the main office… for a sandwich.
They handed me my papers on the spot.
I told the HR guy to go fuck himself, as he was crying.
… Fuck Seattle, at this point.
They are almost certainly still using my databases, my online, public facing intake forms, my process flows and documentation…
Anyway, I was literally the expert on exactly how fucked I was, as a single white cis male, in terms of getting housing or shelter assistance in Seattle.
We shared at least shelter capacity and eligibility info with almost every other shelter in or near Seattle… and almost all of them prioritize families, minorities and/or female domestic abuse victims.
Made more sense to head pretty far east to lower CoL areas and stay in roach motels than to drag my crippled ass around trying to find a working path to housing, given how often I was being mugged, assaulted, held hostage by a psychotic fentanyl addict for a week at one point, missed being shot in a drive by by about 100 feet at one point…
Anyway, all our the widely publicized PIT headcounts of homeless people in any given city or nationwide… basically need to be multiplied by about 4 or 5. So that’d be about 3 to 4 million, not the almost 800k of the last nationwide PIT count.
If you compare the demographics of living situations people are in who requested our help… to the demographics of who actually gets counted by those PIT count methodologies…
Yeah, you need to multiply the PIT count by roughly 4 or 5 to make it actually representative of all the people who are requesting help, but are not counted by the PIT.
… And that will easily balloon up to 10, 20+ million … fuck, probably within a year from right now given how utterly fucked the economy is about to become, and how many governement assistsnce programs are getting cut.
…
But uh, back to things I can now just laugh at…
yeah, Boeing is fucked. They were fucked before the tariffs, and now they are turbofucked, and all the right wing anti union asshats that work for them will just retreat further into delusion and a sense of enraged, denied entitlement as they all get exactly what their AM talk show radio hosts have told them they want for 30+ years.
… and of course who can forget about the liberal tinged, smug, self serving, fake ass corpo tech shitheels who all don’t realize they’re basically dressed down Patrick Batemans because they go to Pride marches… yeah, a whole lot of them are fucked as well as they get laid off, their 2nd and 3rd homes can’t generate AirBnB rents anymore…
Oh no, who could have forseen that working for giant tech megacorps that have explicitly stated they want to automate everything for 20 years… are now automating their own jobs, and that they are not actually special?
…
I dunno if I qualify as a rags to riches tale…
I got maybe halfway through that article before I had to stop.
… Too similar to what I went through, too … way too similar. Its not just that basically no one gives a fuck about it, its that almost everyone assumes the absolute worst about you, all the time, unless you ‘perform’ perfectly for them.
I was recently diagnosed with PTSD. I actually cannot handle reliving, or apparently even reading about those experiences.
They fill me with rage and terror.
Make me double check and make sure my knife is in the spot it ‘lives in’ in my motel room.
…
The teeth thing is real. Somehow I have been insanely lucky with baffling infection resitant teeth… I have never had a cavity in my entire life, despite literally being homeless for over a year.
But I’ve seen the immense agony of other homeless people with bad teeth. Seen people bite into a sandwich and 2 1/2 broken teeth come out in bits…
… Seen people with fucking gangrene, massively infected feet and other wounds…
… For a while I was able to trade my rudimentary first aid skills for respect, cigarettes and food, became kind of a defacto medic at some encampments and shelters I ended up at.
Seen people OD and die in front of me, stumbled upon the bodies in the back alleys, either OD’d or beaten or stabbed or shot to death.
… I can’t believe I survived it. I can’t make sense of why I did.
… Just a skinny, out of shape, Autistic tech dork, streets should have eaten me alive.
… At least I was able to eventually get connected to Physical Therapy, and … not a very good one, but at least at newbie Social Worker.
Solid Snake may wanna go over the basics of CQC… I wanna go back over the basics of CBT.
Physical Therapist has me in aquatherapy. Too many torn and otherwise fucked up ligaments in too many places, have to have the bouyancy and water resistsnce to do any useful stretches without extreme pain.
… sorry. rambling. yay trauma.
Yup, the real pop will most likely happen between fall 2025 and summer 2026. Been sitting on my cash, saving up since dip shit got ‘elected’. Hopefully he doesn’t drive up inflation so much that it cancels out the 15-40% drops we’ll see in home prices. It’s also possible that private equity starts snatching up homes which could stabilize prices somewhat
Private equity buying everything up is probally the “plan.”
Hopefully he doesn’t drive up inflation so much that it cancels out the 15-40% drops we’ll see in home prices.
Well uh… unfortunately:
So thats about an 11% devaluation of the dollar since start of the year, where the dxy is an index based on the volume of currencies exhanged for the USD.
And uh… yeah, we … actually still need to import a lot of shit… so… uh…that line looks pretty steep down, not done sinking yet…
Fucking, who knows?
Oops, God Emperor Trump turned out to be a false Messiah, and is actually somehow a thrall of all the Chaos Gods simultaneously.
I saw this movie! Are those damn immigrants, teachers, poors, and that one guy who served time for causing the Global Financial Crisis back at their old tricks?
I hope tathtub Margot will be in the sequel, too!
Ohhh maybe I can afford a million dollar 2- bedroom fixer-upper soon!
But a house in this economy? Pffftt lol
