BiggerPockets Real Estate Podcast - 925: BiggerNews: Housing Inventory Up 24%, Are We Returning to “Normal”? w/Mike Simonsen

Episode Date: March 29, 2024

Housing inventory has shot up over twenty percent year-over-year. So, are our low inventory struggles finally behind us? During the low interest rate days, housing inventory couldn’t keep up with demand. Within days of posting a listing, properties had already gone under contract, and buyers could no longer bid. But now, with higher interest rates, we’re finally starting to see a return to “normal,” but a rate cut could take us back to scarce inventory in an instant. So, is now the time to buy? Mike Simonsen from Altos Research joins us on this BiggerNews episode to give an update on housing inventory. Mike’s team tracks every home for sale in the country every single week and has been doing so for almost two decades. Today, he gives us the most recent data on homes for sale, why inventory is rising, the states that are seeing the most inventory hit the market, and whether or not we can expect to return to pre-pandemic inventory levels. Plus, for those debating waiting it out for lower mortgage rates, Mike shares exactly how rates will affect housing inventory and why waiting could throw you back into the bidding wars once rates drop again. Mike even discusses the data behind price cuts and when you can expect sellers to start accepting lower bids.  In This Episode We Cover: A housing inventory update and why more inventory is finally starting to hit the market What happens to housing inventory if interest rates fall or rise Florida, Texas, and other southern states that are seeing a surge in housing inventory  Why most investors are wrong about price cuts What must happen if we’re to see inventory rise back to pre-pandemic levels The one thing buyers and sellers should know if they’re waiting for rates to fall  And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch Join BiggerPockets for FREE Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area Expand Your Investing Knowledge With the BiggerPockets Books Be a Guest on the BiggerPockets Podcast Dave's BiggerPockets Profile Dave's Instagram BiggerPockets' Instagram The Housing Market “Signals” That Predict Where We’re Headed w/Mike Simonsen HousingWire CEO: This Inventory Shortage Could Last Decades Hear Dave on The “On the Market” Podcast Watch Dave on the “On The Market” YouTube Channel Connect with Mike Altos Research Mike's LinkedIn Mike's X/Twitter Check out more resources from this show on https://www.biggerpockets.com/blog/real-estate-925 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail].  Learn more about your ad choices. Visit megaphone.fm/adchoices

Hi, investors. Welcome to the Bigger Pockets podcast. I'm your host today, Dave Meyer, and that means we have a bigger news episode. In these bigger news episodes, we take a look at some of the news, some of the data, some of the trends that are impacting our lives as real estate investors. And today we have a really cool episode. We have a great guest, Mike Simonson, from Altos Research. If you've never heard or followed Mike's work before, you're going to love this episode because Mike, Mike, is one of the most experienced experts in housing market data that there is out there. He's been doing this for over 30 years, and his company, Altos, research, provides some of the most up-to-date statistics that you can find on the housing market. And I know not everyone's into statistics. Not everyone loves data. But I think what you'll find from learning from Mike is that stats can really help you make actionable decisions and inform decisions about your portfolio. And it's not like you need a degree. You don't need to be good at math. It's none of that. There's just a couple of data points that you should be following that are going to help improve your entire framework in investing decision-making process. Today we're going to dig into just one stat in particular. It's housing inventory. It really is one of the things that you really just have to understand as an investor if you want to make strong informed decisions. And Mike, as I said, he really understands inventory better than anyone in the business. So with no further ado, let's just bring on Mike from Altos research to talk about the current state of the housing market and housing inventory.

Mike, welcome to the Bigger Pockets podcast. For those of our audience who don't know you or your company Altos research, can you tell us a little bit more about it and how you're involved in the investing industry? Sure. Well, at Altos, we track every home for sale in the country every week. We do all the pricing, all the supply and demand, all the changes in that data. And we do, we bubble up the analytics on the housing market. We've been doing that for almost 18 years now. And we work with realtors and mortgage loan officers helping buyers and sellers understand what's

happening in the market. But we also work with big financial firms and investors and home builders who need to be able to see right now what's happening in the U.S. housing market in any zip code in the country. Well, that sounds like something we want to hear about. you are truly, I think in the industry, you're just known as like the inventory guy. You've always got like the best numbers on inventory, the most up-to-date stats. So we're super excited to talk to you. And as we'll uncover over the course of this episode, inventory is really driving so much of the dynamics in the housing market.

So, Mike, let's just start by having you give us a background on inventory and where it sits today. Yeah. So as of today, we're recording near the end of March here, the 513,000 single family homes on the market or on the country. Another couple hundred thousand condos. But that is, 513,000 is 24% more than last year at this time. It's 102% more than two years ago. And what that means really is, is like if you walk into the market. market today in the U.S., like, these are the houses you can buy. There may be some listed tomorrow.

There may be some that go into contract today or tomorrow. These are the ones that are on the market right now. And so $513,000 is, sounds like it's a lot compared to the last couple of years. It's still pretty dramatically lower than the pre-pandemic time, the last decade. You know, it wasn't that long ago when we would have, you know, maybe a million single-family homes on the market around the country. And right now there's, you know, just over 500,000, 513,000. It's been climbing each week. And it's been separating from last year.

So last year at the end of March, inventory was still falling. We had more buyers and sellers. This year, inventory is building. And so it's separating, you know, last week it was 20. 22% more. The week before that, it was 17% more. So, you know, we're 24% more homes on the market now than a year ago. And so that'll keep climbing into April. And because that was when inventory turned last year. Okay, great. Well, thank you for that deep background. It just, I want to give a little public service announcement here for everyone because what you talked about here is so important is that the headlines that you see that inventory is skyrocketed. marketing things are going up are true. As Mike just said, we're up, you know, significant double digits over last year. We're up a lot over two years ago. But it's also really important when

trying to understand housing market dynamics to take a historic view. And in this case, we can see that inventory is still, you know, roughly half of where it was, you know, not all that long ago. So it's important to understand that context when you're looking at these types of numbers. Now, Mike, I probably should have asked you this question first, but could you please explain for our audience what inventory is? Because there's a lot of different things that are sort of similar. Like there's new listings. There's active inventory. There's the total housing supply in the country.

When we say inventory, what does that mean? Well, we say inventory. We're talking about these are the houses that are on the market now that you can buy. And it actually differs. And that's the inventory number that Altos is tracking every week and that we think is like really. valuable. You know, there are different numbers like the home builders. You might hear about new home inventory, but new home inventory includes things like, you know, vacant lots that have like a power drop to them, but there's no home on them, right? And, and so we will like take those out of

these inventory numbers. You can buy a home with, you know, air quotes there, but, but, but it's not, it's not actually a home yet. So we're looking at like what are homes that you can buy right now? There's new listings, you know, are the new sellers each week? How many sellers are coming to market? And that's an interesting number to watch also. And that's interesting because last year, the new sellers each week were very low. Record few sellers, people selling homes last week, last year. And And so the question is this year, do we have more sellers finally starting to come back to market? And the answer is yes, we do. We have 14% more people sell at homes this week than the same week a year ago.

So starting to see growth in the number of sellers coming to market. So inventory can grow from the new sellers. It can grow from slower demand. That's a great explanation, Mike. And just so everyone understands, these are two different metrics. So when you think about a housing market, you have buyers, right? That's the demand side. You think about sellers, that's the supply side. If you want to just measure pure supply, like how many homes are coming on the market, how many people choose to list their property for sale. That is new listings.

The second data point that Mike was talking about. What we're primarily talking about today is inventory, which, as Mike said, measures not just how many properties are being put on the market for sale, but also how quickly they are scooped up and come off the market. And so that's why I think it's such an important metric and we're going to dive into it today because it measures both supply and demand within the housing market. And that's why it tells us so many things. Okay, so we have now the lay of the land on what inventory is, where it stands today, and we're going to get into how we think these metrics might change in the future right after this break.

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It's well diversified, and it's managed by a team of professionals. And it's now available to you. Visit fundrise.com slash BP Market to explore the fund's full portfolio, check out historical returns, and start investing in just minutes. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise flagship fund before investing. This and other information can be found in the fund's prospectus at fundrise.com slash flagship. This is a paid advertisement. Welcome back investors. I'm here with Mike Simonson talking about housing inventory in 2024 and let's just jump right back into it. With that said,

Mike, can you just give us a little bit of background on what the implications are for inventory? Like, what does it mean that we have rising inventory that is still somewhat lower than it was pre-pamdemic. The rising inventory, it means more selection for buyers. There are a lot of buyers, especially I'm sure listeners to this podcast who are very sensitive to rate changes. And so they are maybe waiting until rates drop before they make a move. What we can see, though, right now is like that selection is starting to improve. And so, and certainly over the pay. pandemic, you know, the pandemic craziness, starting to get back to more normal levels of selection. When inventory rises multiple, like year over year, that is an indication for future price changes.

So we have 24% more homes on the market now than a year ago. That implies that prices, that implies price essentially softness. I'm calling it essentially flat pricing. this year for nationally. And so an implication of rising inventory is, you know, we have a, we have less, we have a different balance to demand versus supply than we did a year ago. A year ago, we had more demand than supply in this moment. The year ended up five or six percent.

Home prices ended up five or six percent last year. And you could see it right now because we had more demand than supply in, in this first and second quarter. And so now we see that shifted. We see supply growing. And so that implies future, you know, softness. Now, there's no signal in the data for like price crashes, but those are some of the signals that we can see there. Thank you. Yeah. I think it's important that everyone knows that inventory is often how we measure the balance of power is the way, I guess is how you would say in the housing market, right? When inventory is extremely low, that is typically a sell. market because there is more demand for homes than there are homes for sale in the market,

giving sellers the power to dictate terms to negotiate price. This is what we saw during the pandemic, right? This is when people were waiving contingencies and they were off making these crazy offers without seeing homes. On the other side, if there is more inventory, if inventory is high, that signals that there is more supply, there are more homes for sale on the market than there is demand. that puts the power back into the buyer's camp. That's why we call it a buyer's market.

And so this is one of the main reasons why looking at inventory is so important, especially, you know, we're talking a national level too, but also looking in your individual market because even if inventory is doing one thing on a national scale, it might be totally different in another market. Like, Mike, I don't know how much you look at individual markets, but I think of a market, I always pick on Austin these days. because it's seeing the biggest correction. Great city.

No, no, nothing against it. But you see inventory is just skyrocketed there over the last couple of years. And that is correlated to a correction in that market. Whereas you look at a lot of markets, actually in the Midwest, northeast, they have a lot lower inventory and prices are really stable there. So just want to make sure everyone understands why looking at this data is so important on a national and regional level.

Yeah. And there are big differences in the, national, in the local markets right now. So right now, the Gulf states, the Gulf markets from southwest Florida around through Louisiana down to some of the Texas markets have the biggest increases in inventory, the biggest year-over-year increases in inventory. So all the way over to Austin. Austin has more inventory now than any time in the last decade. And Austin has been a hot market for a decade. And so, like, it is the first time it's getting back into a more balanced market, you know, and as rates rose, the inbound, like the California migration, when rates are 3%, it's

very easy for someone from California to go, like, oh, I'm just going to bid a hundred thousand bucks over because, you know, it moves my payment by a couple hundred bucks a month. And now they're much more sensitive to that. And so those offers, don't get made, those houses build on the market, et cetera. Like that is what happens there. Right now, the Southwest Florida markets from Tampa all the way down, Sarasota, Fort Myers, all of those markets have also inventory back to pre-pandemic levels. So 2019 or earlier and still rising.

Some of those markets, it's a little, it's always a little tricky to go, why, but some of the reasons that those markets are slowing and inventory is building is because post boom, in the last few years, property taxes and insurance costs have risen dramatically in those markets. And so the holding costs for a home there has grown significantly. And, you know, contrast that to California where your property taxes don't go up. and California has just 7% more inventory now than a year ago, just starting to grow positive. There are five states now that still have less inventory than a year ago.

And those are like, it's like New York and New Jersey and Illinois and like a few. But each week, that gap is narrowing. But still like a lot of the Midwest and Northeast is, you mentioned, are still just now coming off the pandemic lows of inventory. We had dramatic lows and just now starting to climb, where some of the Gulf states are like back to pre-pandemic levels. So definitely different local things happening. But in general, inventory is rising in all the markets and will continue to rise as long as rates stay high or move higher. If rates fall this year, let's say they're at seven now and they go to six and a half or

6.3 or something in the next few months, that trend's going to reverse. That will spur demand a lot of your listeners, right, will go, hey, I've been shopping at 7%. Suddenly at 6.3, I'm making a move. That competition heats up. And so that will keep a cap on inventory. It'll actually start bringing it down. And, and, uh, but as long as rates stay, you know, here around seven or move higher, that will, that means inventory will continue to climb in the year. All right. I do want to touch on that, Mike, and talk about rates in just a minute.

But I just want to make sure everyone understands because we've talked a lot and thrown out a lot of different data points here. But to me, and, you know, jump in here, Mike, if you think there's something else here. But I think there's two things. If you want to look at inventory in your local market and make sense to you, I think there's two things you should be looking at. One is just the recent trend. So is it going up? How quickly is it going up? And then two is the relationship to pre-pandemic levels. Because I think even if it's gone up 100 percent and it's still half of where it was pre-pandemic, that's not necessarily a sign that

prices are going to start going down or anything like that. So if you want to simplify this, those are two pieces of advice, too easy to find data pieces that I would recommend. But Mike, do you have anything else you would add there? Yeah, and we can watch. So I think that's exactly the perspective to watch. So if you're thinking about buying in Southwest Florida, and you can see, you know, Sarasota inventory is climbing right now. Like, that is absolutely something to pay attention to.

And or, you know, if you're selling, if you have investment properties in Southwest Florida, like that gives a lot of insight into how you should price a property you might want to sell. we can watch, interestingly, the percentage of homes on the market with price cuts, and actually know, is that a lot? So is inventory rising and do we have more price cuts than normal? Because that's another signal about where the impact of rising inventory. So, for example, in Fort Myers, about 50% of the homes on the market have had price

right now. That's a little higher than normal and it's on its way up. Those are continuing to be softening signals for home prices and demand in Sarasota and Fort Myers in that area. Where, you know, a year ago, Austin was rising inventory and was leading the country in price cuts. Austin's further down the list now, which implies that even though inventory is up in Austin, it has found a little bit of stability in the pricing. And so using both of those together can really be insightful because a lot of times people will look and they'll go, wow, inventory is rising. Look out below, right?

Here comes the crash. And so it's really useful to put a little more context around it. They'll also sometimes go and they'll say, they'll go like, hey, I'm looking around my neighborhood and I see four price cuts. and that's fine, but, you know, it turns out it's a normal level. Like normally about a third of homes take a price cut. You know, in Phoenix, normally 40% of homes take a price cut before they sell. And so, you know, if Phoenix is, if you see one down the streets, it's taking a price cut,

that doesn't tell you anything. You got to look at the actual trend over time. That's a great tip. Thank you, Mike. And I think that's why it's so important, everyone, to just look at data in your local market and try and get as full of a picture as you can in different stats. And Mike, you had a great example there. Okay, time for one more short break.

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They obsessively measure the things that matter for your bottom line. Things like occupancy, delinquency, and net promoter score, and they have the results to prove it. Go to mine.co slash show me to see how mine performs and get your first month free, which is much cheaper than learning the hard way. Welcome back to Bigger News. I'm Dave Meyer here with Mike Simonson of Altos Research. Let's jump back in. Now, Mike, you mentioned interest rates. It is on top of everyone's mind. Now, I love to play a game here on these podcasts and see if I can get our guests to make predictions about where mortgage rates are going. Are you willing to levy a prediction for us here?

So I will start by saying that I don't predict mortgage rates and that I have been wrong on mortgage rates for 30 years. Okay. Well, then maybe we don't want to hear your prediction. Well, if you think about it, like, you know, I bought my first house. I bought an investment property in Chicago, a two-flat in, you know, the mid-90s. And, you know, I locked in for 30 years because I thought my 8% rate was a good rate. And it could only go up from there, right? And I bought my second house in 2001, and I locked in for 30 years because I thought rates could only go up from there.

So that's what I mean when I've been wrong for 30 years. But here's what we know. And like, so like I said, I don't know where rates are going. What I do know is how the housing market will react if rates go up and how the housing market will react if rates go down. So higher rates mean more inventory. And you can think about it as demand slows inventory grows. That is counterintuitive to a lot of people who right now are saying,

I just want to wait until rates fall because then we're going to get the inventory and I'm going to get some selection. But it's the actual, the data shows the opposite is true. We talked early about new listings and some of those demand indicators. So when rates fall, you'll get more sellers, but you'll get more buyer competition. So if rates fall, demand spurs more than supply. So inventory actually falls if rates fall from here. So, you know, rates are right now about 7%. We've been expecting we being the experts have been talking about rates falling for

18 months and they still have, you know, have not. And if anything, they're headed higher. They've headed higher since January 1. And so as a result, we can see the year-over-year inventory climbing in that time. So rates are climbing. Higher rates mean more inventory, lower rates. mean less inventory. And like I said, you can use the, think about it as demand slows, inventory grows. So that's really what we can see. We can also see like a jump in rates show up

in a bunch of the other stats. So like we talked about price reductions. And we've had mortgage rate spikes in September of last year. We had it in September of 22, two big mortgage rate spikes at the end of year. And almost to the day, we can see the price reductions data turn up at exactly the same time. And what happens is if I'm shopping now at 7% and some news hits and suddenly mortgages are at 7.5 or 7.6 or and marching towards 8, if I'm buying, suddenly I don't make that offer. The seller doesn't get that offer. A few more of those sellers say, wow, I got to cut my prices per demand. And so we can watch that impact. like to the day of the mortgage rate increases.

And likewise, if rates, you know, have been bouncing around here in the sevens for a month and now or suddenly they move down into the mid-sixes, the opposite happens. If I've been shopping at seven, six and a half feels great. And that brings me to the second point that I like to make about mortgage rates, which is consumers are more sensitive to changes in rates than to the absolute level. So, you know, if we're at seven now and by the end of the year, we're at 5.8, the market is going to queue up to be very hot in 2025. It'll be that adjustment of 120 basis points down, and people will feel a lot, a lot of demand will get spurred there. Likewise, the other direction can happen.

So consume people are more, are more sensitive to changes. in rates than to the absolute levels. Okay. Well, you just dropped so much good information in there. Let's unpack a couple of these things here. So first and foremost, when we're talking about rates, you mentioned that we don't know and that they might actually go higher. And I just want to clarify for everyone, there are a lot of different opinions about this. We don't have time to get into why rates might go higher, why they might go lower.

But I think one thing that we probably can all agree on is that there is a lot of uncertainty about rates. And the assumption that rates are going to go down is not as concrete as I think a lot of people, perhaps on social media or in the mainstream media, are saying. And that just because the Fed is signaling that they're going to cut rates does not mean that mortgage rates are going to go down. They are not tied to the federal funds right. They are tied to the bond market. It's a whole other topic. But I think just I want to clarify that because people might hear, Mike, you say that rates might go up and they're like, oh, I heard the Fed is going to up rates. So that's number one. The second thing here that's crucially important to our conversation

here is about inventory. And as you said, inventory, for those people who may be theoretically waiting for rates to come down and for inventory to go up, that is not what is likely to happen. Instead, like Mike said, when rates go down that spurs demand, probably more demand, and it will probably spur a faster increase in the demand side than on the supply side. And that creates more competition and that pushes up pricing. That's why you've probably heard on this podcast or on the other podcast I'm on on the market. We talk about this a lot that if rates go down, people say that they want that, but it also means they're going to face a lot more competition and we might have the type of housing market dynamics that we saw during the pandemic. And I think this is important for

investors, homeowners, whatever, to internalize here is that everything's about tradeoffs. There is no perfect real estate market that you can invest in. You can invest right now where rates are higher, but there's less competition. Some see that as a benefit. Some see that as a downside. If rates drop, that might make your monthly payment more affordable for a period, but prices will probably go up and you're going to be bidding like crazy. Some see that as a benefit. Some see that as a detriment. So I think it's just important to really, instead of saying now is a good time to buy now is a good market, thinking about here's what's good about this market and here's how I can operate successfully in this market versus here's what the future market

might be and how I might have to shift my strategy in that market. Yeah, if you are the type of buyer who is able to compete with offers, like maybe you wait. If you are the type of buyer who is, has like, you know, got out bid 40 times, you know, over the pandemic. Maybe now is when you have the fewer bidders, right? There's definitely those dynamics at play. And, you know, and like, I think the important thing, though, is that about six months ago, a lot of people were asking me, Mike, if we're. rates fall in 2024, as they were expected to six months ago, if rates fall dramatically in

2024, would that potentially mean, suddenly there's a bunch of sellers who want to sell who've been waiting because they want to move up and they can't move up. And so they're locked in. So that unleashes a bunch of inventory. And what if a bunch of those sellers come out at the same time and therefore prices drop. And is that like, so that was a really common question about five, six months ago for me. And so, you know, that because the assumption is that rates are high, so nobody's selling. So therefore, low rates would mean more inventory. And really what I try to help people understand

is that the opposite is true. There's lower rates mean less inventory. Like when we have more demand, I'm going to, I'm going to buy more and own more. That's an excellent outlook for the next couple of years here, Mike, and an understanding of how people can navigate the market here. Before we get out of here, I'm curious your opinion on the long-term outlook for inventory. And just for some historical context, inventory has been declining basically since the Great Recession, right? Like, it spiked up during the Great Recession. I think it peaked in, correct me from 2011, 2012, something like that. 2012, yep.

And then since then, it's been coming down pretty, you know, linearly. And then it really sort of like dropped off during the pandemic. Do you think it's realistic for us to think that inventory might ever get back to pre-pandemic levels or back to levels that we saw in the early 2010s? Like, what, you know, is this the new normal that we should expect for years to come? So this is exactly the next corollary to the interest rate discussion. So in that period, that last decade, 2012 through now, interest rates were generally falling. They were generally low and falling.

In that period, the one year that inventory rose year over year from like January to January was 2018 to 2019. And what happened in that year, mortgage rates rose by about 100 basis points. They went from like four to five and inventory rose. then, you know, at 2020, rates dropped dramatically, inventory dropped dramatically. So now we're two years into higher rates, and we're two years into more inventory.

So you could imagine a world, it took us a decade down to get, of low rates to get to the record few on the market. You could imagine a world of multiple years of higher rates that allows inventory to build back up. So we've had two years of higher rates. We've had two years of rising inventory. If we have two more years of rates that are high or rising, that would allow.

What happens is you think about the reason inventory has been falling over that decade is because of the investors, like people that, you know, love bigger pockets, right? It's like, I'm buying my next house. And at 3%, I'm keeping that first one for my investment property. Now I have two. Now I do that a few times, right? now I have a portfolio. And we did that eight million times over the last decade. So now, if rates are seven, I want to buy the next one. I have to sell the first one to finance the next one. A few of those investment deals don't pencil out, right? Those go back onto the market.

So inventory starts to build. And so it's been two years. So multiple years of higher rates get us to build back to towards the old normal. You know, each year we have fewer people. Everybody's got a 3% mortgage, so nobody ever has to sell that house. But there's 5 million home sales a year. So 5 million people have now a 7% and they're not locked in. 10 million, we have 10 million people because we're two years in now.

And so, you know, two more years, now there's 20 million people who aren't going to be able to keep that first one. And so those go back and in. So over the, it's a multiple year of higher rates that get us back to the old normal. And likewise, if rates start coming down again, then that'll stop that trend and things will tighten back up again. All right. Great analysis. I really appreciate that. I didn't really thought about that. How every year we go by, the lock in effect is essentially getting diluted. Diluted. Yep. Five million people a year. Yeah, that's super interesting. And definitely something

that we'll have to keep an eye on. Luckily, we have you, the inventory guy, to call next time we need to talk about this. Mike, thank you so much for joining us on this episode of the Bigger Pockets podcast. Dave, I always appreciate it. I appreciate the work you guys do. Another big thanks to Mike Simonson from Altos Research. If you want to connect with Mike, you can always find his contact information in the show notes or show description.

Just as a summary for everyone who is listening to this, there's a lot of discussion of data, different things that you could be tracking. different metrics. But if there's one thing that I think you should take away from this episode is to keep an eye on inventory. I know there's tons of different stats that you can follow, but inventory is so important because as I said during the episode, it measures both the supply side of the market and the demand side of the market. And as Mike so helpfully explained to us, if you track inventory in your local market, the trends, how it relates to historical patterns, you can get not just a sense of where housing prices might be going, but also help you establish your strategy

for how you want to bid on a property. For example, if you know that housing inventory is really high, you might bid at asking price or even try and bid a little bit below asking price because you know that supplies outsizing demand. In contrast, if you're operating in a market where housing supply is really low, you know you're probably going to have to be pretty aggressive with your offers. So by tracking just this one metric, you can learn a ton about housing market dynamics, both on a national level and in your local market. So go check it out. We will put a link to Altos Research. You can also find this data on Zillow. You can find out Redfin, the realtor.com. This information is relatively easy to come by. So just Google it for your market and go do some research yourself. Thank you all so

much for listening to this episode of Bigger Pockets podcast. I'm Dave Meyer, and I'll see you soon. Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.w.w.w.com.

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