09/07/2026
I’m being asked often, “So Jay, if it’s as you say and there are more Sellers than Buyers right now, then why have home prices not dropped?
Simple - Sellers don't need to sell. But they may sell, IF the right offer comes along. So they just hold firm on their list price.
Most sellers right now are selling because they are moving up or moving down, and not because they NEED to move. It's a choice. Many homeowners no longer need to be convenient to their place of employment – so location is not as much of a factor.
They are also sitting on a 3% rate. And they know that if they move and parlay their equity into another home with another $300-$400k mortgage, they'll pay $13,000 PER YEAR in additional mortgage interest just for the privilege of a change of scenery. Nope, you’re not getting THEIR house unless you "Make them an offer that they can't refuse"
Issue of affordability isn’t a factor – IT’S AN EXCUSE.
First time homebuyers are blaming affordability. Well, the average first time home buyer is 38-42 years old now – 8 years higher than it was just 11 years ago. 40-year-olds have different priorities, different lifestyles with higher societal standards, different personas they've embraced, and are set in spending patterns and habits that are not budget centric – habits that are hard to break. AND since they didn't buy a home (any home) in their mid-twenties they’re not carrying $150,000 in equity to buy a home that suits their 40-year-old lifestyles.
Damn right THESE first-time homebuyers have an affordability problem, but it's self-imposed.
Do you think that twenty-something year old who bought their first home (any home) 10-15 years earlier and is now carrying $125,000 in equity buying a “life-stage appropriate” home in their late 30’s and early 40’s has an affordability issue?? Doubtful.
Nope, what today’s first-time home buyers REALLY have is a priorities and a waiting problem. Don’t blame the market.
And one other concept keeping entry level homes off the market: Those first-time homebuyers who purchased their first home in their early twenties, are observant enough to know that TODAY’S first-time buyers are waiting longer to buy. They also know it’s creating a demand for rental housing. So, they are retaining their first entry level homes as investment property when they move up. And that entry level home never hits the market.
Lastly, we have Institutional Buyers. You know, the mega investment groups that purchased homes out of bankruptcy or foreclosure after of the crash. They have an extremely low cost-basis, and great cash flow. Balloon financing notwithstanding, why would THEY sell?? And THOSE entry level homes never hit the market either.
So if you need housing, and you’re young and your housing needs are simple and flexible, just go buy a home (ANY home) – it’s STILL the best hedge against housing affordability.
Cheers!
