Let’s get to the caveats right off the bat: Re:Ventures has been quite bearish on housing in recent years, even predicting a crash; their landing page complaints “The US real estate market is in a record bubble in 2023;“this post suggesting”90% Chance: RECESSION in 2022?” did not work out. These two perspectives are unrelated to my point of view.
That said, I’m willing to ignore their opinions because I find their data analyzes so intriguing. As an example, see the map above showing “house values”. Re:Ventures generates maps like these using data from Zillow, specifically the Zillow Home Value Index (ZHVI). It’s hard to say how Zillow puts this data together (see if you can make sense of it). methodology; I could not).
I like the idea that we should be looking at the evolution of house prices in each price range rather than the combination of expensive and cheap houses. Can’t tell if Zillow uses sale prices of sold homes or is it a combination of Zillow sales, listings or valuations? (Honestly, I can’t decipher what’s what from their methodology disclosures).
With that preface aside, consider the different ways these maps can show changes in residential real estate at the national, state, metro, county, and zip code level:
Home Value, Home Value Growth (YoY), Home Value Growth (MoM), Inventory For Sale, Inventory For Sale Growth (YoY), Price Reduction Share (%) , Days on Market, Days on Market Growth (YoY), Monthly House Payment, Property Tax Rate, Building Permit, Building Permit (%), Mortgaged House (%), Housing Units, Rate Housing Unit Growth Growth, Sales Inventory Growth (MoM), Home Inventory %, Apartment Rent, House Rent
There are similar tools to analyze demographic changes: population, median household income, median age, home ownership rate, poverty rate, salaried jobs, total migration, migration % of population.
They also offer a suite of premium analytical mapping tools that cover: % over/undervalued, value to income ratio, home payment as % of median income, % accident from 2007 to 2012, % d phantom inventory, cap rate, buy or rent calculator %, rent as % of income.
I’m not a subscriber, but I’ve been playing around with the various tools, and they look quite interesting. The main challenge, of course, is whether Zillow’s underlying data is worth it or not. If it’s good REAL sales data and not just modeled opinion, it seems like it has a lot of potential use.
As for the crash to come, my buddy Jonathan Miller observes:If you talk to brokers in the field, there are far fewer investors than in the previous boom. Strong demand for primary and secondary residences.” This, added to the shortage of single-family homes due to under-construction and the blocking of cheaper mortgages, suggests that a real estate crash is unlikely anytime soon…
Are we in a recession? (No) (June 1, 2022)
What data appeals to the NBER recession? (September 1, 2022)
The post-normal economy (January 7, 2022)
What recession? (June 26, 2023)
How everyone miscalculated housing demand (July 29, 2021)