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Mike Simonsen

@mikesimonsen.bsky.social

2.9K followers 190 following 740 posts

I help people understand the housing market. Now: Chief Economist, Compass. Prev: Founder CEO Altos Research (acq by HWMedia)

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Mike Simonsen @mikesimonsen.bsky.social · 16d

Why aren't home prices falling like you might expect now?

It's what Chip Case called "downside stickiness." When the market slows, sellers don't want to sell at a loss, so they withdraw listings, which keeps supply limited.

That's what we're seeing now. THREAD 📽️🧵👇

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Mike Simonsen @mikesimonsen.bsky.social · 9h

Also available on the Compass YouTube channel:

youtu.be/CoEIFFgNOCQ?...

Real Estate Conversations | Episode 1: Understanding Mortgage Rates Today

YouTube video by Compass

youtu.be

Mike Simonsen @mikesimonsen.bsky.social · 9h

New Podcast Alert!

Real Estate Conversations is where I get to interview the smartest people in the industry to learn from their expertise.

Everyone cares about mortgage rates now so episode 1 is with the mortgage rates GOAT, Matt Graham.

open.spotify.com/episode/3gXc...

Understanding Mortgage Rates Today with Matt Graham, COO of Mortgage News Daily

Spotify video

open.spotify.com

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Mike Simonsen @mikesimonsen.bsky.social · 6d

Maryland is just playing catch up!

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Mike Simonsen @mikesimonsen.bsky.social · 6d

Doing some work with the Compass data team today. Thought this looked cool

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Mike Simonsen @mikesimonsen.bsky.social · 7d

Looking at the MBA purchase mortgage applications on a 13-week rolling average really highlights the current trend

Mike Simonsen @mikesimonsen.bsky.social · 7d

Such excellent insight and a fascinating story!

Jason Furman @jasonfurman.bsky.social · 7d

During what turned out to be a 13 day government shutdown in October 2013 CEA released a report that projected 120,000 private sector jobs lost.

It ended up being 227,000 private sector jobs gained--even more than any of the prior four months.

Mike Simonsen @mikesimonsen.bsky.social · 13d

Existing home sales are inching above last year as reported by NAR.

In our weekly pending contracts, the slight growth over 2024 continues.

Last year the brief mortgage rate dip to 6.1% in September lifted the sales rate for Q4. Will be interesting if we can beat that this year.

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Mike Simonsen @mikesimonsen.bsky.social · 14d

Interesting that LA is less affordable than SF in your set. Is that because LA renters have significantly lower income?

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Mike Simonsen @mikesimonsen.bsky.social · 14d

New home sales big print feels like survey noise to me. What would be the sudden catalyst?

Existing Home Sales tomorrow from NAR should show YoY gains but nothing in the real-time data says massive shift.

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Mike Simonsen @mikesimonsen.bsky.social · 14d

Some millennial will thank you for the infill opportunity.

Reposted by Mike Simonsen

Conor Sen @conorsen.bsky.social · 14d

An interesting comment @mikesimonsen.bsky.social made in his weekly housing video for Compass this week is the sellers withdrawing listings aren’t those with tons of equity, it’s ones who bought more recently who don’t have that equity cushion and can’t afford to take a lower asking price.

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Mike Simonsen @mikesimonsen.bsky.social · 15d

If you’d like to read more detail, I authored this Report in May:

www.housingwire.com/articles/una...

Unaffordable by Design: What’s Next for America’s Intractable Housing Crisis?

An exclusive dive into the roots of America’s housing affordability crisis — revealing how we got here and what it will take to chart a new path forward.

www.housingwire.com

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Mike Simonsen @mikesimonsen.bsky.social · 15d

In specific, you keep referencing data from several years ago.

Wall Street funds are in fact net sellers of homes right now.

So to the extent that they deserve blame for home price increases during the free money era, they deserve credit now for dropping prices in the towns where prices are down

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Mike Simonsen @mikesimonsen.bsky.social · 15d

The result is that we support existing home owners and their prices. To the detriment of those who don’t yet own.

I’m of the view that blaming Wall Street for the crisis is myopic and naive, when really we should be blaming “Americans.”

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Mike Simonsen @mikesimonsen.bsky.social · 15d

But those policies: eg zoning laws, low taxes, environmental laws, foreclosure prevention all exist for “good” reasons.

We don’t want to kick grandma out of her house because of high taxes.
We don’t want to build on every square inch of land…

Mike Simonsen @mikesimonsen.bsky.social · 15d

Because we’re so favorable to owners, real estate has been a great investment in that time.

Wall Street is a tiny tiny portion of the investor class. That money was what pulled us out of the GFC finally!

There are lots of policy changes we should make to fix the crisis.

Mike Simonsen @mikesimonsen.bsky.social · 15d

Look, you’re not alone in seeking blame for our affordability crisis and there’s no more ready-made-villain than “Wall Street Landlord.”

But in fact we have 60 years with every law, tax, policy in the US inflating home prices to help homeowners, to the detriment of those who do not yet own.

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Mike Simonsen @mikesimonsen.bsky.social · 16d

Furthermore, investors are an important and valuable part of the housing economy.

Most renters are not in a position to buy. They *need* rental homes to rent!

It is a misinterpretation to assume that if an investor buys a house that means a homeowner cannot.

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Mike Simonsen @mikesimonsen.bsky.social · 16d

Investors is not the same a “Wall St”

Only 4% of all investor purchases are firms with more that 1000 homes.

96% of investor purchases are people who own 1-4 homes. Otherwise known as “Americans”.

www.housingwire.com/articles/no-...

No, Wall Street investors are not buying up a bunch of homes

The share of institutional investors buying houses is even lower in 2024 than last year, when it was nowhere near the reported 44%.

www.housingwire.com

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Mike Simonsen @mikesimonsen.bsky.social · 16d

My guess is you’ll barely notice it. We’ve been anticipating the Silver Tsunami for at least a decade. Boomers are still net buyers of real estate. They don’t want to sell ever. At some point the grandkids will get a house or two.

Mike Simonsen @mikesimonsen.bsky.social · 16d

I assume you shared that bc you think that “Wall Street” is keeping prices artificially high?

Alas, nope. Wall Street owns a tiny fraction of the homes. Like 1%. In fact the towns like Tampa and Phoenix where those companies invested the most money are the markets where prices have dropped the most

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Mike Simonsen @mikesimonsen.bsky.social · 16d

7/7 Some buyers are waiting for lower rates and lower prices. The data says they may get one or the other but both may be elusive.

This week's video:

youtu.be/r_kNzYC7J0Y?...

Why Home Prices Aren’t Falling Like You Might Expect

YouTube video by Compass

youtu.be

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Mike Simonsen @mikesimonsen.bsky.social · 16d

6/7 We see it in the price reductions too.

41.5% of the homes have taken a price cut from the original list price. That level isn't increasing.

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Mike Simonsen @mikesimonsen.bsky.social · 16d

5/7 This "downside stickiness" psychology is a key reason for price stability.
This week, the median price of new pending contracts ticked up to $397,500, coming in almost 2% above the same week last year.

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Mike Simonsen @mikesimonsen.bsky.social · 16d

4/7 But here's the interesting part:

Even with limited supply, newly pending sales were up almost 5% from last year this week. We counted 77,000 sales contracts started this week.
More transactions are getting done in states with more available inventory.

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