75,000 “Relistings” Could Hit the Market, But Inventory WON’T Explode?

0:04If you're watching inventory climb right now, it can look like supply is surging. But a big part of what is hitting the market is not truly new supply. It is homes that tried to sell last year, got pulled, and are coming back as relistings. And this is a really new phenomenon in inventory dynamics that really changes how you should be thinking about market dynamics. I'm Dave Meyer, and today I'm joined by Mike Simonson to break down this relisting trend, why it's happening, how to separate relistings from new listings, and what it tells us about seller behavior, buyer demand, and price pressures as we head into the spring market.

0:45We're also going to dig into why inventory can rise without sending prices lower, how pending sales can improve at the same time, and what investors should do with this information in the next few months. This is On The Market. Let's get into it. Mike, welcome back to On The Market. Thanks for joining us again.

1:02Mike Simonsen:Dave, it's always great to be here. Well, we are excited to have you here. I was thinking about writing an episode to talk about delistings and relistings, and I figured, why not just have the inventory master himself come join us? So we're excited to hear from you. So it seems like this trend that we're seeing with a lot of interesting movement in inventory kind of started in the fall with delistings, right? Can you maybe just give us some background on what's going on there? Yeah. So the housing market stayed slow for four years now. And if you're a seller trying to get an offer for your house, and if you don't get the price you want, you can cut the price or you can pull the house off the market and try again, wait for better conditions.

1:49Mike Simonsen:Both of those things were happening last year. Both of those things were happening at an elevated pace. So the most of any, you know, recent years. And so that means like you cut your price and maybe get the offer and then you move it. But if you don't have to sell, the option is like to withdraw or delist or let it expire. And there's any number of ways that that happens. You know, so we watch that. And one way to track that is not just in a total number of those, but also as a percentage of the new listings. So like what percent of the people who are listing now ultimately withdraw? Oh, interesting.

2:30Is an interesting way to think about it, right?

2:32Mike Simonsen:So it's, if there's more homes on the market, there's going to be more withdrawals. There's going to be more sales and, you know, like all the numbers will be bigger. So doing it as a percentage of new listings is an interesting way to look at it. So what did you find? I mean, I'm curious because, yeah, like, of course, if more things are being listed for sale, there's probably more delistings. but proportionally what was going on. So proportionally, you get a few things. You get a kind of a canoe shape in the year where D-listings climb over the holidays and then fall again in the spring. You get fresh new inventory and you get new buyers.

3:10Mike Simonsen:And so you're not withdrawing over the spring. But then if the year progresses and you don't have a buyer, now you start thinking about it. And so it's very common to have more withdrawals over the holidays. As a percentage of new listings, though, last year might have been 35 % or 40 % in the third quarter. So 35 % of those new listings are ultimately getting frustrated. And that compares to like 25 % the year before, which compares to maybe 20%. Each year longer in a slow market, you see more people who are getting frustrated. Over the holidays, that might normally jump to 50%. Or last year, 24 was 60%.

3:52Mike Simonsen:And in December of 25, we counted 80 % in that. So a really dramatic, elevated number of delisting. So that's as a percentage of the new listings. January dipped back down to 44%. So dips down and will fall February or fall lower again in March. April will be the lowest months. And then you get a little elevation in the spring. So that's the delisting. So delisting is definitely elevated, hasn't resumed back down to the very normal, you know, the more normal levels. Like it's still elevated. All of those pieces are in place now. And it really kicked in last year. Delisting is probably not a sign of a healthy market, right?

4:36Like it reflects some imbalance between buyer demand and supply out there, right? Or pricing mismatches. But the thing I kept thinking about, it was like, it also, maybe it reflects health in home sellers. The fact that they are able to pull their property off the market rather than continuing to slash prices, or at least that's what I was thinking. Like there's not, this is better than forced selling, which is kind of the other option, right?

5:05Mike Simonsen:I think that's exactly what it reflects. In other words, almost everybody in the country still has the best mortgage term ever in the history of mankind. And so for those folks, if they don't get the offer, one option is to sell never. It is super cheap to hold the house. each day that there's fewer and fewer of those folks some of those people you know those deals transition there are more people who have expensive mortgages and so that option fades a little bit every day but there's still a lot of them and at the same time there are folks even if you don't have a cheap mortgage like let's say you bought in 2023 you still have your job unemployment's low And so you may want to move, but find yourself with really no price appreciation over the past few years or maybe negative if you bought at the peak in Austin or something like that.

6:08And now it's painful to take that loss.

6:11Mike Simonsen:So you say, well, I'm going to try to do it at a gain, but I can't. And so I'm going to wait. So it also is a reflection of the fact that basically everybody's still employed. Unemployment is still low. So there isn't force selling on that side really either yet in the cycle. Maybe that comes, but it hasn't come yet. Right. Of course this can change. Like if unemployment shoots up, something will change, right? It will. But there's no evidence of that just yet. I think when you hear these ideas that there's going to be massive force selling or foreclosure clashes, that is speculation. I'm never going to say it could never happen, but it is speculation at this point, not really evidence.

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9:51Welcome back to On the Market. Let's jump back in with Mike Simonson. So, Mike, you alluded to sort of the flip side of this, though. I remember reading something you wrote talking about delistings and saying, like, maybe what happens in the spring? Are they all going to be relisted? or are these permanently coming back? So maybe update us on the relisting trend now.

10:13Mike Simonsen:Yeah, so I think it is very easy to look at the delistings of last year purely as supply for this year, like supply that wants to happen. These are home sellers that want to sell. Therefore, if they come back on the market, there could be a flood of inventory of these folks who clearly tried to sell but couldn't sell. And so that's the intuitive take, right? Wow, there's a lot of delistings. If they come back, then there's a lot of selling. There's a lot of listings and there'd be a lot of active inventory. And maybe that has therefore negative price implications, right? More supply. My observation in the Compass data, we dove in and looked and did some evaluation of like, who are the delisters?

11:03Mike Simonsen:And it turns out that most of them are... Flippers? Owner-occupiers. Oh, really? Okay. I thought it was going to be all flippers. That's super interesting. So most of them are not investors or flippers. Interesting. Okay. Most of them are owner-occupiers. And that means that these are actually delayed demand as well as delayed supply. So these are folks who want to move up or want to move down, but they've delayed it because the conditions aren't right. So if conditions improve or as conditions improve, you could look at these and see that most of them are owner occupiers. Most of them are two transactions that want to happen.

11:43Mike Simonsen:And so there is shadow demand there as well. Now, there are some investor flippers. There are some folks like in some of the second home markets of Florida, where maybe these are not two transactions. These are people like, I just want to unload this thing. And to that extent, those would add to supply. But in our analysis, most of the folks we see, because delisting, it's not just happening in Florida, it's everywhere. Yeah. Okay. That was kind of my next question. It's like, it's just ubiquitous. It is. It is by our measurement. And when I get to talk to agents across the country, they're all, well, I had a seller, he tried and it's probably overpriced, but he's going to wait and try again.

12:28Mike Simonsen:That is super common. Yeah. I wonder what happens with transaction volume in the next couple of months? Because I think at some point, people just have to realize, like rates are probably not going down that much this year. And like, maybe, you know, we'll get, you know, sort of a proportionate rise in supply and demand at the same time and hopefully kick us back up from that dismal home sales report that we had at 3.9 million. I'm curious if you think that's likely this year. Well, so in our data, in the weekly data, we don't see nearly as dip as NAR reported. I am suspect of the seasonal adjustment they did.

13:05Mike Simonsen:I can't find that. I can't find a massive dip in the data anywhere. So I didn't see it. Maybe timing of the snowstorm and maybe there was some end of month closings that didn't happen in the NAR data. I don't know where it came in, but man, I couldn't find it in any of the real time. The pendings in December slowed. And so, you know, not great improvement in demand, but like we're measuring a few percent every week, typically better than a year ago. I'm optimistic. I just feel like, you know, I saw this dealer report that came out the other day that said the average mortgage payment now is 8.4 % lower than it was a year ago.

13:49And I just got to believe it's, you know, we're still not great affordability, but any improvement in affordability has got to help get those pendings and the transaction volume up a little bit, right?

14:00Mike Simonsen:Yes. I agree. It's, yeah, it's 8%, cheaper now, and every dollar makes a few more people, puts a few more people in the market. And so, yes, I think that's the case. You know, the one week we saw a dip last week with the deep freeze below year over year. But here's the thing. You know, my assumption and my hypothesis about the delistings, relistings, is that these are really two transactions that want to happen. And right now we can see the relistings and there are 75 ,000 single family homes that are now relisted. They were pulled last fall and they're relisted back on the market now. It's like 11 % of the active inventory.

14:43It's a lot.

14:44Mike Simonsen:It's higher than last year. Right. They are coming back on the market now. But if they come back on and the pendings don't climb, or if they come back on and inventory expands, that would disprove my hypothesis. That would just say that these are people, this is only supply that wants to come on the market. If there's 75 ,000 people, like if inventory is rising by 75 ,000 because these are all relisted, that's a thing I'm looking for. What we're seeing, though, is that active inventory is actually, it's not yet below last year at this time. But in Florida, it is below. There are fewer homes for sale in Florida now than last year at this time.

15:24Mike Simonsen:Really? And I think almost nobody is aware of this, right? Yeah. If you ask anybody, they'd assume inventory in Florida is expanding. Yeah. Like one thing that I have been tracking is what you would expect in a normal correction, right? is that in the markets where prices are declining and their softness, new listing data is declining the fastest, right? Like another sign that people just have the option not to sell and in markets like Florida, they're just choosing not to. Yeah, but we have sales up 8 % in the weekly pending data. The sales are up 8 % year over year in Florida. Oh, interesting.

15:58So there's more sales happening too.

15:59Mike Simonsen:There's more homes available to buy. There's more transactions that can happen. There are some bargain hunters happening. Like there's a few of those things coming into place that are keeping sales a little bit elevated and inventory falling in Florida. So inventory is still up 8%, 8.5 % year over year nationwide. But that was, you know, inventory a year ago has grown by 30%. Right. Yeah. And so it's now down to 8%. And if the current trends hold, we could be negative year over year by June. We could have inventory shrinking. Right. I know. It's wild. It just makes you laugh about all these like doom and gloom things that we're saying over the last couple of years that we're going to see this massive explosion of inventory.

16:40I think on this show, we've been a little bit more measured and maybe that's proven correct. But I think that, you know, that phenomenon is super interesting and important for our audience because it tells us a lot about like where the housing market might be going, which I want to ask you about. But before we do, the last thing just on the pure inventory side, new listings are down, right? Are you seeing that as well, that fewer people are posting new properties for sale?

17:04Mike Simonsen:In our data, weekly new listings are really about the same as they were a year ago. In the last two weeks with the deep freeze and storm, they dipped below last year. That's totally common in February. Like storms happen. And so you can get like, if the storm happens in January, then you'll get the dips earlier. But in general, outside of that weather, I'd say that they're about the same as they were a year ago, maybe within a few percent, plus or minus. Yeah. The market is adapting in the way that, to me, logically makes sense, right? We've moved to a buyer's market in a lot of markets. To see sellers choose not to sell makes sense, right?

17:51Like, especially given the recency bias that's going on, right, where they're like, oh, my neighbor sold three years ago, like 100 ,000 over asking. I don't want to sell into this market. It's just not that appealing to sell these days. So I think, you know, it does seem like the market is heading towards some more stable equilibrium. At least that's what I'm saying. What is your sort of outlook for the year from here?

18:17Mike Simonsen:Yeah, our outlook for the year is that because inventory is up and affordability improves not just mortgage rates, but, you know, incomes rising faster than home prices in most of the country, like that improves affordability. That leads us to forecast about a 5 % sales growth in 2026. 5%, not huge, but a little bit. and in the weekly data, the weekly pending data, it's been coming out right 3%, 5%, 8 % improvements over last year, like I said, with the dip for the storm for the first week last week, but in general, it's been averaging about 3%, 5 % more. So that, in my view, bears out our forecast.

19:03Mike Simonsen:A year ago, the opposite was happening. So we kept coming in slightly under, you know, and a year ago, mortgage rates were 100 basis points higher than they are now. And so we were missing on the forecast numbers each week. And so this year, they're coming in right where they need to, to have a full year of gains. We looked at scenarios of like, what would it take to have a big gain year? What would it take to have like a 10 % growth year in home sales? And a bunch of things would have to align at the same time to make that happen. Like, you know, mortgage rates dip maybe into the fives in the first quarter here.

19:44Mike Simonsen:Yeah. That kind of thing would move. But it's also, it's not just that, it's also the jobs market. Unemployment's still relatively low, and the latest numbers, you know, show it seems like it's actually dipping. The number that I'm, that I care about really for the year is the hiring rate. So even though unemployment's low, companies are hiring at a rate that is much more like a deep recession. I know. It's weird. It's weird, right? Everybody's holding on to the job they have. And it's like, if I wanted to sell my house in Chicago to move to Denver, but I'm afraid about getting a job in Denver, I'm delaying that move.

20:24Mike Simonsen:And so I'm not selling in Chicago and I'm not buying in Denver. So if hiring rate ticks up during the year, maybe you get some Fed rate cuts, you get whatever, you get AI investment things, whatever the things are. If hiring rates improve this year, I believe that will have a cascading effect down to the housing market, allow people to be like, OK, now I can finally move out of Ohio and go to Texas where I've been wanting to go for a while. Interesting. Yeah. And I guess that probably just extends beyond voluntary relocations, too. where companies are probably not hiring people from other states and asking them to relocate to a new location, which we see that in the migration data now, too, that it's slowing down generally.

21:09Mike Simonsen:Yeah. And migration data is a little tricky because it's lagging. It's backward looking, but all of it shows a lot less migration. You know, 24 and 25 really down migration in places like Tampa with actually out migration, negative. I would expect Tampa flips around this year and actually comes back to positive growth on the migration side because we didn't have any hurricanes last year. People have a short memory. We've got to take one more quick break, but we'll be right back. Stick with us. Did you know your house gets bored when you leave? I can't actually prove that, but it probably misses out on the action, the footsteps, the late night fridge raids.

21:53Yeah, when you're gone, your place is basically on unpaid leave. It's sitting there in the dark thinking, I could be contributing right now. Your side room wants a side hustle. Even your Wi-Fi is like, we could be networking. You're on vacation, spending money like it's a sport, while your staircase at home is fully capable of sending your income upwards. Here's the twist. You can go on a trip and actually earn money. Airbnb makes that possible with the co-host network. If you're away for a while or have a secondary property, you can hire a vetted local co-host with real hosting experience to handle it all.