The “Delisting” Wave Putting Years of Housing Market Gains at Risk

Dave:Good deals and big discounts have been easier to find over the last couple of months, but could that change as more and more sellers start fleeing the housing market? Are we actually on track for a return to tighter inventory today on the market? We’re getting into the latest trends that are shifting in the housing market and can have big implications for the entire real estate industry. Hey everyone. Welcome to On the Market. I’m Dave Meyer. I hope you all had a wonderful break for Thanksgiving. Before we get into today’s show, I did want to extend my thanks for all of you, the BiggerPockets and the on the market community. We are very lucky to have you. We are very lucky to be able to make this show for you twice a week. So from the entire BiggerPockets team, thank you for all the support for your listenership over the last year.We’re really excited about what we have planned for you in the coming year. There’s more great on the market episodes to come. So with that said, since we were on break for a week, a lot has happened in the housing market and that’s what we’re going to go over first. In today’s episode, I’m going to just run through a bit of housing market news just to make sure everyone knows what’s going on with the latest trends and the latest data. Then we’re going to spend a lot of time in today’s episode talking about this new dynamic that is evolving in the housing market. We haven’t seen this in quite a while, actually eight years. We haven’t seen this dynamic emerge. It is delisting basically people pulling their homes off the market and there are a lot of implications for this. So we’re going to dig into that and then towards the end of the episode, I’m going to talk a little bit more about the American consumer.I’ve put out some information about this, but the more I read about it, the more data that we get. Now that the government is back open, I have more and more concerns about the average American and obviously that fuels the housing market that fuels rental demand. And so I’m going to talk a little bit about how some developing trends with the American consumer could spill over into the housing and rental markets going into 2026. So that’s the plan for today. Let’s get into it. First up, let’s talk about home prices. They are still up nominally year over year depending on who you ask. If you look at Redfin, which provides more recent data, it says it’s up about 2.3% year over year. So I just want to call out. I made my prediction about one year ago. I think I said it was going to be 2.5% year over year.It’s at 2.3%. It’s pretty good. I can’t wait to rub that in when James and Henry and Kathy are on to make our predictions for next year in a couple of weeks, but they’re not here right now, so I’m going to gloat about that a little bit while they can’t defend themselves. So that’s good. And those are the numbers that we’ve used to make predictions, but I should call out that if you look at other data sources like the Case Schiller index, that lags a little bit, but it’s still showing that prices are up 1.3%. So that’s what we’re seeing over the last couple of months of 2025. Now, the fact that these home prices are up might be at odds with what I said at the beginning, which is that home prices are in a correction. So I just want to explain that a little bit because I’ve been saying for a couple of months, I think maybe most of this year that I think we’re in a correction.And there’s basically two reasons for that. First and foremost is the trend. The average appreciation across the country a year ago was closer to 5%. Before that, it was like 8% years. Before that, it was double digits, which is not normal and we are seeing a reversion of appreciation back to border normal levels. Actually, the average appreciation rate in the United States over the last couple of decades is about three and a 5%. We are now below that by pretty much every measure I’ve seen, which to me is just the beginning of a trend and we are going to see home price growth in nominal terms, not inflation adjusted terms go down even further. But the real reason I think we’re in a housing correction is based on what I just said about the difference between nominal non inflation adjusted and real, which just in economics means inflation adjusted home prices.Because if you look at home price growth, what’s happened in 2025 is that home prices are growing slower than the rate of inflation. And I know this might just seem like a trivial difference, but to me it’s pretty important because when I invest in something personally, I want the value of that to at least keep pace with inflation. Now, if you have leverage and you take out loans, it doesn’t need to work exactly that way, but I do think it’s an important benchmark for the housing market whether real home prices are going up or down and they’re definitely down. Even if you take the higher number that I just referenced, Redfin, right? That’s 2.3%. The CPI, the consumer price index, that’s our inflation data. That’s at 3.1%. So even in the most optimistic view, real home prices, inflation adjusted home prices are down 1%. If you look at the case Schiller, which is a very reputable index, it’s down about 2% and this to me means we’re in a housing correction where relative to people’s incomes relative to inflation, home prices are going down.Now this comes with both pros and cons. It means that yes, if you are owning property, it is not keeping pace with inflation if you have no debt on it, but it also means things are actually getting relatively more affordable even with mortgage rates staying where they are. Because what this measurement tells us is that because home prices are following and real wage growth, which is inflation adjusted income is actually going up. That means homes are getting a little bit more affordable and in my opinion, any improvement in affordability is a good thing. Now, of course, not everything is the same across the country. We are still seeing very different markets, but everything is sort of moving in the same direction. And in fact, when you look at the Case Shiller index, they put out this 20 city index and only four of those markets are seeing real home price growth.Chicago is leading the pack, it’s up 5.5% in nominal terms. So that actually turns out to about 2.4% real returns. New York City is up, Boston is up just a little bit, Cleveland’s up a little bit, but everyone else, all other 16, so 80% of all the markets that they track on the case Schiller are negative. A lot of them are pretty close to flat, but when you look at the most extreme example of that, Tampa, which has negative 4% nominal home price growth, and then if you add the inflation onto that, that’s negative 7%. That is real correction territory in Tampa specifically, but I think more and more markets are going to move in this direction. That’s why I think we’re in a correction is that yes, most markets are now starting to see declines. I think more and more of them are, and I don’t know exactly if nominal home prices on a national level will fall next year.I think a lot of that will come down to supply side, which we’re going to talk about for a lot of this episode. So stay tuned for that. But just wanted to call out what’s going on with home prices and that we should expect more weakness, softness, generally speaking with home prices going forward. A couple other things to note just as investors and real estate industry experts here days on market continue to go up, we’re now at 49 days. Seven weeks is the average days on market. This is very different from where we were a couple of years ago. This is another reason that I said at the top of this episode that deals and discounts are getting easier to find. Things are sitting on the market longer and that gives buyers more negotiating power. In fact, you can actually measure how good the negotiating power is getting by this other piece of data called the price to list ratio.This basically measures what percentage of the asking price a seller actually winds up getting for a property they list on the market, and right now it’s at 98%, meaning that the average buyer is negotiating a discount of at least 2%. Now, a couple of years ago, the average price to list ratio was like 1 0 3 and things were even getting listed higher. And so this just shows that it is switched from a market where things were on average going above, asking to. Now on average things are going 2% below, asking people might not feel like 2% is that much, but that’s actually a lot in my opinion because the median home price right now, 430,000, if you are getting that 2% off, that’s nearly $9,000 in savings also, that’s just the average. And if you are a real estate investor and you’re looking to buy deep and buy great value, hopefully you can get three or four or 5% below asking, which could be 10,000, it could be $20,000 off your asking price, and that really matters.So as a buyer for real estate, those things are encouraging as is the fact that the median mortgage payment right now is at 2,500 bucks. I think that is good news. It’s probably a combination of prices falling a little bit, mortgage rates getting a little bit better, they’re kind of back up again. But I think that is encouraging. Again, say it with me, any improvement in affordability is good news for the housing market. So I’m taking this one as a win. And then the last thing I want to share, which is sort of a good transition to our next section where we’re going to talk about delists, is that new listings, the amount of homes that are being listed for sale in any given month is up only 3.4% year over year. I know it’s surprising because everyone says there’s way more inventory and there is more inventory.People are saying sellers are flooding the market and the housing market’s going to crash. I don’t know, new listings only up 3.4% year over year. That’s pretty normal change in any given year. That doesn’t sound like a flood of listings going on, and I think this is why so many people in the housing market focus on the demand side. If you ask the average person what’s going to happen in the housing market, if you read the news, the average news story is going to talk about demand side, meaning it’s talking about buyers, what they are doing, how many people can afford what, but the supply side is equally important. The supply side is crucial. It’s at least 50% and I think it’s going to tell us a lot about what’s going to happen in 2026 and there are new trends, changes happening on the supply side of the housing market. We’re going to get into that right after this quick break. Stay with us.Welcome back to On the Market. I’m Dave Meyer. Thank you all so much for being here. Before the break, we talked about just some trends going on with pricing and how the buyer’s market is real and buyers are taking advantage of the situation right now because when you’re in a buyer’s market, what it means is that there are more homes for sale than there are buyers, and that means sellers have to compete for buyers. But we are seeing this new trend emerge that could reverse that or at least could stabilize it. So I mentioned earlier that new listings are down. That’s one thing that could stabilize it, but we are actually starting to see that delists people who put their home up for sale and then take it off has increased a lot. It’s actually at the highest it’s been in eight years since 2017, which was some fairly unremarkable year in housing, but basically it’s gone all the way back to where we were eight years ago.Now if you’re wondering what the technical definition here is, I’m looking at this data and basically something counts as a delisting when it goes off the market for more than 31 days without selling or going under contract. And that’s basically what we’re seeing right now as of this point in 2025, we’ve seen about 84,000 such listings this year. Last year it was just 66,000. So that is a very significant increase. That’s like a 30% year over year jump. If you go all the way back to 2021 when things were obviously insane, it was about 46,000. We’ve gone from 46,004 years ago to 84,000. That’s a really big jump. We need to ask ourselves why is this happening and why is this changing so much in just the last year? Because it did go up when prices went up, but it’s been kind of flat in 22, 23, 24, it didn’t really change.So why is it changing now in 2025? Well, the reason is kind of self-evident, right? It’s that sellers are not getting the prices that they want. For years, sellers could basically throw a dart at a dartboard, go out with any listing price that they want. Maybe they didn’t get full list, but they were getting offers. They were probably getting multiple offers, and that has completely changed. I am trying to sell a house myself right now and everyone is negotiating. Everyone is trying to low ball you, and that doesn’t mean you still can’t make money off these things, but it just shows the psyche of buyers have changed, and I think that has led a lot of sellers to say, you know what? I don’t want to sell right now. I’m not going to get the price that I want. I’m not going to get the terms that I want, so I’m not going to just have my property sit on the market.I’m going to take it down and maybe I won’t move after all, or maybe I will wait for better selling condition. And I think this trend is going to continue because this probably is obvious to you, but the homes that are getting delisted are the ones that have been sitting on the market the longest, right? The average home that was delisted in September, which is where this data is from, had been on the market for more than a hundred days. As of now, seven in 10 listings on the market right now have gone stale as of September, and stale means 60 days. So they’re not at that a hundred day mark, but the fact that 70% of listings are now at that 60 day mark means that a lot of them are probably going to be heading towards that a hundred day mark. Not that that’s some magical number, but I think it shows that more and more sellers are probably going to face this decision in the next couple of months, whether they want to de-list and remove their property for sale or they are going to wait it out and just see what they can get.So overall, people are removing their properties because frankly a lot of them are not getting what they want or they don’t want to take a loss. Actually, the data here shows that about 15% of the homes that were delisted in September were at risk of selling at a loss, which is a decent amount. And so they’re basically choosing not to lose money on a sale, which makes sense to me, but 85% of people have the equity. They could turn a profit if they went to go sell. They’re just choosing not to. And I think that’s important because as we talk about on the show a lot, the way a correction turns into a crash is when sellers no longer have a choice of whether they want to sell. And a lot of these people, even the people who could be underwater and taking a loss, that doesn’t mean they have to sell it, doesn’t mean they’re missing mortgage payments.That’s a crucial distinction here. They just wouldn’t make money. And so all these people collectively are deciding that they don’t want to sell right now. Now, of course, you could probably intuit that this matters because the more delists that we have explains why home prices are rising, despite the fact that home buyer demand is not really that strong. It’s actually gone up a little bit in the last couple of weeks, but really for all intents and purposes, over the last year or so, demand for housing has not changed very much, but we haven’t gone into a full blown crash, and that’s because even though buyers are adjusting to this new reality, sellers are also adjusting to this new reality. I started this segment by saying that people always forget the supply side of the market, but the supply side is absolutely crucial. And the fact that one new listings are only up 3.4% year over year shows that sellers are reacting to bad selling conditions.The fact that more people are taking their properties off the market than they have in eight years is showing that sellers are reacting to bad selling conditions. If there was a crisis in the market and there was going to be a crash, these people would not be taking their properties off the market. They would be lowering prices if they were desperate and they were trying to sell. This is what happened during the financial crisis. People had to sell. They didn’t have the option to take it down, and so they had to lower their price and lower their price and take any offer that they could get, and that kind of mentality spirals. But the opposite is happening right now. People are saying, nah, I don’t like these selling conditions. I don’t have to sell, and so I’m not going to, and this is again, the sign of a correction, not a crash.If you dig into this, the markets with the highest percentage of delists are the markets that are correcting the most. So we see in Austin, in Miami, in Fort Lauderdale, in Dallas, in Denver, highest number of delists. If you were in a crash and there was a true emergency there, do you think the markets that were going down the most would have the most delists? No. You would see bigger price cuts. You would see more and more people listing their property for sale. Instead, we were seeing people saying, I don’t like this. We’re in a correction. Our market is weak right now for sellers. I’m going to sit back and wait to see what happens, and I should mention, this is normal. This is what you would expect. This is the logical reaction for sellers who do not need to sell and don’t want to take a loss.Some people might say, Hey, I really just need to move. I’m willing to take a loss. Fine, but not everyone is going to do this, so this is the logical thing that is going to happen. Now you might be wondering if this is going to continue. Do they take it down? Just put it back up. I was curious about that myself, and so I looked into it and so far the data shows that only 20% of homes that have been taken down have been re-listed. We’ll see what happens. Part of me thinks that that number might go back up after the new year. People took their homes down in September, October because there’s always this slowdown in Q4 and maybe they’ll re-list them in January. We’ll see, but 20% is low. It’s pretty low. It shows that people are not that eager to get back into this market, but this is a trend that we’re going to watch.We look at new listings a lot this year, but this de-listing trend is something that we have to keep an eye out for because if this trend continues, we actually might see inventory plateau, right? All these people saying there’s going to be a crash site inventory, inventory is going up, inventory is going up. We might actually see a plateau according to Redfin. Active listings, which is a measurement of inventory is only up 6% year over year. That is not a crash territory, right? 6% year over year inventory growth, that’s not a lot. And so if delists continue, if new listings stay at this lower rate, we might see inventory peak, and that could provide a stable base for the housing market to either recover from a correction or stay kind of flat for the next year or so, which as you all know, I think is the most likely scenario.But if delisting really start to drop, we can see prices grow next year. The reason I’m sharing this is because it’s so important to look at the supply side and see how the health of sellers is. We need to measure how desperate they are. I mean, I know that sounds pretty dramatic, but it’s true. That’s what a crash would take. Sellers need to get desperate, and this data shows us that sellers are not desperate, at least as of yet. Hopefully, this helps you understand where the housing market is and why it keeps saying that we were in a correction and not a crash, but there are some concerning signs in the broader economy if we’re not just looking at housing. If we zoom out and look at what’s happening with the American consumer, I do have concerns there, and we’re going to get into the new data that is shedding some light on the tough time the average American is having, especially the average young American. Right after this quick break, we’ll be right back.Welcome back to On the Market. I’m Dave Meyer. Before the break, we talked about Delists and how that is showing a logical reaction to what’s going on in the housing market, on the supply side and why I think that shows us we are in a correction, not a crash, but I do want to say not everything is rosy right now, and the more and data that we get about the broader economy, the more concerns I have as I think the word recession is pretty much useless. I came up with, I put out a whole episode talking about that recently, so I don’t want to, I’m not even going to get into this argument about whether we’re in a recession or not, but I think the reality is that American consumers are struggling, and I know that can sound abstract, but it does matter for real estate, and I’ll explain why in just a minute.I should also mention that this episode’s coming out on Tuesday. On Thursday, I’m going to do a deep dive into something called the K shaped economy. It’s this idea, if you haven’t heard of this, is that the US economy is, there’s basically two totally different realities. They’re the high income earners, the wealthier 10, 20% of the United States. They’re doing great, but the bottom half of the economy, maybe the bottom three quarters of the economy is living in a very different reality, and that is going to have huge implications for housing and the housing market for rentals, everything going forward. And so I’m going to do a deep dive into that on Thursday, so check that out. I think it will be pretty eyeopening for all of you what’s actually going on, but a couple of news pieces came out over the last couple of days that I just wanted to point out to keep you all informed.Consumer confidence continues to fall. People are not feeling good about the economy, and actually there’s this other measurement that comes out with the consumer confidence report, which is just consumer expectations. How do they feel about their personal finances? And they are at the lowest point they’ve been since 2009. I think that is a really important thing. I’m not trying to be sensational here, but the fact that people are comparing their own personal finances to the depths of the financial crisis has to mean something, right? People weren’t even saying that in 2020 when everyone was freaking out about COVID. People weren’t even saying that in 2021 and 2022 when inflation was running rampant and was destroying people’s spending power. So clearly something concerning is going on here. Now, of course, consumer sentiment, it’s not a tangible thing, but it does matter because it’s a lead indicator for other things that can happen, and actual impacts are starting to show up.For example, car delinquencies, right? People are paying their car notes less and less right now. They’re actually reached the highest level. They’ve been since 1994, higher than they were during the.com bust higher than they were during the great financial crisis. We’re at nearly 6.6% for car loan delinquencies, which matters. Now, I know that people wary and worried about delinquencies and foreclosures and defaults on debt because of the financial crisis. I just want to call out that the auto loan market is a fraction of the home buyer market. It’s like 10% of the total home market, so it’s not on that scale. So I’m not trying to say this to say, oh, the whole system is going to fall apart. I’m just telling you, anytime I think people start to default on debt, that is concerning because if you study the economy, business cycles, recessions and bad economic times start when debt starts to default.That is basically the trigger that often sets off a chain reaction of negative economic outcomes. And although we have seen very low delinquencies by historical standards in the housing market, which I want to reiterate very important, we are not seeing this in the housing market. The average American homeowner still paying their mortgage, still doing well, but other cracks are starting to evolve. We’re seeing it in student loans, we’re seeing it in car payments, and this is a concerning trend that we need to keep an eye on. The next thing I want to call out, I saw this the other day and it was really concerned about this. If you look at the unemployment rate in the United States, it’s still pretty low. It’s like 4.4%. It’s not bad. It’s going up, but by historical standards, 4.4% unemployment is good, but I saw this data point that the unemployment rate for people between the ages of 20 and 24 is now 9.2%.That is crazy. That is really bad. Just so you know, the overall unemployment rate during the great financial crisis, which was bad, that was a bad job. Loss recession was around that, that was around 9%. Now, obviously that’s not happening across the entire economy, but the fact that so many young people are out of work is going to have broad implications for the economy, and I think specifically for housing, obviously this is just bad. Young people obviously need jobs, but I think this really matters a lot for real estate investors to keep in mind because young people usually form households, right? Household formation is the basis of rental demand and housing demand. How many people are out there looking for homes and young people in particular, if they’re unemployed or if they don’t have well-paying jobs are probably not going to go out and form those households, meaning they’re going to live with a lot of roommates or they’re going to live with their parents or find other accommodation instead of going out and getting that one bedroom or studio apartment, and there’s signs all across the economy that this segment of people is hurting, right?It’s the unemployment rate. Student loan debt is very high and delinquencies on that student loan debt is going up. If you look at that car payment thing, I was just talking about who has the highest delinquency rate? It’s young people. That’s always true. It’s always young people who have the highest delinquency rates, but that combined with the fact that they’re having trouble finding work. I also saw a stat that a college degree now no longer gives you any advantage in finding a job. That’s crazy. That’s a trend that’s been happening, but if you’re looking for a job, having a high school degree and having a college degree at this right now, about the same probability of getting a job. Now, college graduates still do have a higher wage premium. They earn more, but that is pretty wild, and so this is one reason I am growing increasingly pessimistic about rent growth in the next year.I just think this combined with further labor market weakness is going to constrain rent growth. People are struggling on their car payments. People are struggling on their student loan payments, credit card debt. Actually, the delinquency rates kind of leveled off. That’s a good sign, but people in general are having a hard time affording things, and so to me, household formation is going to slow. I think we are going to see less and less people striking out on their own, moving out of their parents’ home, moving away from having a roommate, and that’s a bad sign for rent growth. I’ll just be honest about it. I think it’s a bad sign for housing demand. Maybe supply will react accordingly, but this is the main thing that I wanted people to take away today is as you’re underwriting, as you’re planning for 2026, I would have very modest rent growth expectations in the first half of this year.I think I was saying by 2026, I think rent growth is going to pick up, and I based that prediction and belief based on supply, on the multifamily supply that is working its way through the market, and that is happening. The multifamily supply is working its way through the market, but I think the demand side is getting weaker and is going to stay weak. I personally don’t see a turnaround in the labor market happening in the near future. I know, yeah, maybe the Fed will cut rates 25 basis points. You think all these companies are going to start hiring 20 year olds because the fed cut rate 25 basis points. I definitely don’t, and so I think keep your expectations for rent growth lower, especially if this is your target demographic. I lease to a lot of young professionals, that’s where I’ve bought houses and multifamilies over my whole career, and the people who are usually my tenants are in their twenties, and so I’m definitely going to temper my expectations for rent growth in the next year.If you’re renting to families or older folks, it might be a little bit better, but I just want to call out that I’m personally changing my own forecast for rent growth next year, and I think it’s going to be pretty weak, and I don’t know your market, obviously look into your own market, but I think these broad trends suggest that you should be cautious about your own rent growth expectations in the next year. That’s what I’m going to be doing, and I just want to call this out so you can consider doing it as well. We’re going to dive into this topic again, a lot more just about the different economies, how it’s kind of split in the United States, and what this means for housing much more in Thursday’s episode, so make sure to tune in for that. For now, that’s all we got for today’s episode of On the Market. I’m Dave Meyer. Thanks so much for listening.