The "Sellers Strike" Accelerates

New Listings down over 20% in Many Markets

I strongly believe the real estate market won't crash (although it will go down some). But market activity is going to crash. It's not a good time to be a real estate agent or mortgage broker.

For a crash to happen, there would need to be a spiral of defaults and distressed sales. Otherwise people would just hold onto their 30-year, 3% fixed rate mortgage until either rates come back down or inflation catches up to home prices or, most likely, a combination of the two. And as you can see from the Mortgage Credit Availability Index released by the Mortgage Bankers Association, credit availability was never particularly high between the 08 crash and today whereas it was through the roof between 2004-2007.

So while inventory is rising and prices are going down, new listings are collapsing. Already in many markets, they're down 20 percent year over year. In Santa Clara, they're down 35 percent!

Expect this trend to accelerate through 2023. I wouldn't be surprised if new listings in 2023 were less than half of what they were in 2021 when it's all said and done.