March 2, 2024

The housing market shoots up different signals every so often. For most investors, though, these fly under the radar. But for data-driven housing market experts like Mike Simonsen, these signals are hard not to notice. If you want to know where prices will go next, when inventory could spike, and whether or not demand will start to fall (or rise), you MUST know what these signals are and how to find them. Today, we’ll let you in on the not-so-secret way to predict housing market moves so you can invest better than the rest.

Altos Research’s Mike Simonsen didn’t start as a housing market enthusiast. He was in Silicon Valley, working with data, just trying to buy his first overpriced house. But, through getting his foot in the door of real estate, he uncovered that no one had the data he needed to make better investments. So, he started Altos Research to finally give real estate investors, realtors, and everyday homebuyers the tools to make their best buying decisions.

Over the past seventeen years, Mike has been analyzing, segmenting, and qualifying housing market data for some of the most prominent investors in America. And now, he’s here today to share his time-tested secrets with you. No matter your skill level, you’ll be able to pinpoint the housing market signals Mike showcases so you uncover where the market is moving before the masses. Whether you’re an investor, homebuyer, realtor, or renter, this data will help you build wealth better than ever.

Dave:
Hey, what’s going on everyone? This is Dave Meyer, your host of On the Market, and today we have a pretty great episode for you. We have Mike Simonsen joining us, who is the founder and CEO of Altos Research. If you have never heard of Altos before, it is a real estate data company, one of the first out there, at least that I became aware of. It provides information to real estate investors, home buyers, financial institutions, all sorts of stuff. And Mike and I have a fascinating discussion about how to analyze your market in really good detail. And we talk a lot on the show about how you have to know your local market data, but in this episode, in the first half or so, we really talk about specifics like what actual data you should be looking at and to really understand your local market.
And then, because Mike is one of the foremost experts on the housing market out there, I do pick his brain a little bit about what he thinks is going on in the housing market, where he sees it’s heading over the course of this year, and what data points you can look at to find the “signal,” basically what data points really matter in this crazy confusing economy that we’re in.
Before we jump into the interview, I just want to say full disclosure, at BiggerPockets, we do license some Altos Research data. None of that really comes up in here. I just want to let you know that if you do download some of the data ever from BiggerPockets, we do get some of that from Altos and just wanted to make that clear. But with that said, we’re going to take a quick break and then jump into our interview with Mike Simonsen from Altos Research.
Mike Simonsen, welcome to On the Market. Thanks for joining us.

Mike:
Dave, great to be here.

Dave:
Well, I’ve known you for a while Mike, but could you just please introduce yourself to our audience for those who don’t know you yet?

Mike:
Sure. I’m Mike Simonsen, I’m the founder of a company called Altos Research, and we track the housing market. Every week we track every home for sale in the U.S., all the pricing, all the changes in pricing, and the supply and demand, and we bubble up all the analytics for people who care about such things. We do a lot of work with the realtors and help them inform their clients about what’s happening in the local market. And we work with big institutions and Wall Street funds and home builders who also need to understand what’s happening right now in the real estate market. Investors of course. And we’ve been doing that for 17 years, and I’m a longtime Silicon Valley guy, done data software for my whole career, and I just happened to roll into the real estate space 20 years ago when I bought my little old overpriced Silicon Valley piece of junk house with a giant mortgage and I’m 30 years old and I needed to know what was going on. And so I started building data at that time, and it ultimately turned into Altos Research.

Dave:
Honestly, I didn’t know that story, that you fell into it. You’re a very prominent thought leader on housing market data, and I figured you had a real estate background.

Mike:
Yeah, no, I have a data background and I have data visualization and how do you really communicate with data and what is the data actually saying? And so I applied that to housing. And it’s hard to think about now, but so I bought a house in Silicon Valley in 2001, as I like to say two bubbles ago, and it was like you’re buying this 50 year old 1,000 square foot house for 1,000 bucks a foot, and it’s nuts. And then on top of it, at that time, the NASDAQ bubble was bursting. And so home prices in Silicon Valley in the town I bought in, Los Altos, home prices fell by a third in 2002.
But what I was noticing is because I was tracking every single home is I noticed that I’d bought the cheapest home in Los Altos, and it was still the cheapest home. And so while the median price in Los Altos fell by a third at that time, the bottom didn’t go anywhere. And so those are real insights that I could start to share with people. And I did it personally for a bunch of years before we started realizing we had more information, more than anybody in the world, on the housing market. And then suddenly it was the housing bubble, and it was a crazy time to start a housing data company, but that’s when we launched it.

Dave:
That’s a great story, and I do want to get your take on what’s going on in today’s market in just a second. But can I ask you, why is it that real estate data has taken so long to evolve? It just seemed like you started doing this 20 years ago, no one else was doing it. A lot of this data, or at least there was a lot of publicly available data, what do you think has taken so long for real estate to catch up to the level, let’s say, of the stock market, for example, where they have abundant data for investors to use?

Mike:
Yeah, so there’s a few things that go on. One is that housing is actually a lot smaller data than stock data. There’s five and a half million home sales a year. It’s not that big. And so stocks move every second and there’s massive amounts of data. The other thing that happens is home sales are very local and they’re controlled very locally. I like to say that the U.S. housing market, because it has 700 local MLSs and they don’t talk to each other and they work with their realtors, but they don’t really have a mandate to inform the public like all of these competing interests. And in the U.S., the U.S. housing market is so messed up that nobody like Altos existed yet.

Dave:
It’s too scary.

Mike:
It didn’t exist. On the other hand, much of the rest of the world is even more messed up. And so Altos couldn’t exist in a world where in France, you still got to know the guy who’s got the listings and he has the listings because his father had the listings and nobody knows anything. And so in a lot of the world, it’s even more messed up. And so there’s this market dynamic that caused that. And it’s really fascinating. When we started, I quit my J job January 1st, 2006, and I started doing Altos full-time. And in 2006, this is when the bubbles, there were moments of the bubbles, subprime started breaking in 2006, 2007, 2008, and people can tell you now what the median home sales price was at that time.
But nobody could tell you how many homes were on the market, what’s the days on market, how many of them took price reductions? Nobody tracked those things, and a lot of that was because the local MLSs, especially at that time, were not very technical. They didn’t have a database, they had a list of homes. And so nobody tracked any of that. And so suddenly I’m looking at Altos and I’m like, “There’s so much signal in all this data. These homes haven’t sold yet. The sales price is in the future.” And so there’s all this signal that nobody had. All the academics couldn’t do that work because they could do it a little bit of work, they might get listing data for LA, but they couldn’t do it nationally because there were 700 different MLSs.
And so none of the academic work had been done before Alto started building all this data nationally, and now we do a lot of stuff with universities and stuff. But that’s why the only academic work that had been done really before that was like, “We can get tax record data, so let’s go look at the home prices based on tax records.” That’s what had been done up until then.

Dave:
Yeah, it’s really progressed tremendously in the last whatever 15, 20 years in large part to what you do. I want to talk about you said that there’s a lot of signal in there, and for those people who don’t have as much of a data background, there is sort of a saying or it depends how you word it, but you have a lot of noise and data, there’s a lot of information in what you try and identify as the signal. What information, what data is actually helping you answer the questions that are relevant to you or help you predict the future of home prices or whatever you’re trying to predict really. So now 15, 20 years into this Mike, what data do you think provides the strongest signal for real estate investors?

Mike:
So we focus at Altos on the active market. These are the homes listed for sale. These are the prices, these are the changes in prices. And what’s happening is that you could think about this progression where traditional housing data is about the sold price, how many homes sold and what was the price? And so that’s backward looking, like we know now how many homes sold in March and what the prices were. Or in some places we still don’t know what happened in March yet, but if we look at what’s on the market right now, we can see where the homes are priced now. We can see how many of those took a price cut this week or how many have taken a price cut. Is that accelerating, are those price cuts accelerating? So if you’re on the market now and you don’t get an offer and you do a price cut and then you get an offer in May, and then that deal closes in June or July, you start to get that information in August.
But we can see right now that 29.5% of the homes in the single family homes on the market in the U.S. have had a price cut, 29.5% right now. And that’s significantly fewer than the start of the year. And it’s declining, which implies that, and you know this if you’re actually in the market, there’s been a surprising amount of activity this spring, like buyers are buying stuff and you can see it in the price reductions. Or you look at the last year at this time, price reductions are climbing rapidly each week because the brakes were on.
And so that’s the signal that you can see, and these are sales that haven’t happened yet. And the active market is rich with these signals that you never see in the sales data. The sales data is you look at number of sales and so how many homes sold. And it’s very tempting to use the fact that there are very few homes selling right now relative to normal times. It’s very tempting to use that and say, “Oh, there are no homes selling, therefore there’s no demand.” But it turns out we’re in a supply constrained market, and so if there was more supply, there’d be more transactions. So the signal is about how much supply is there and how much that’s changing each week and how much that changes relative to where it would in the middle of April in normal years. There’s all kinds of signal like that.

Dave:
And how do investors use this type of data to give themselves an advantage in their decision making?

Mike:
There’s a bunch of ways to do it. One is to say, “If I’m making an offer, I might know how much competition there is, I know how long those places are on the market.” So this house has been on the market for 21 days. Is that a lot or is it not a lot, right? Are we seeing each week prices tick up because we know that they’re over-bidding, or are they ticking down because they’re not bidding? So we can use that to understand where we need to come in as an investor, how quickly do we need to offer, can we walk away, are there going to be more options? Those kinds of things that we can do. The other thing that we do that was really a personal thing when I bought that cheapest house in Los Altos, I bought 1,000 square foot house and there were multimillion dollar homes in that neighborhood and I had the plan to expand the house, add 1,000 square feet, and make a lot of equity right away because I could build less than it was selling for.
And so what we do at Altos is we look at every market in four price range segments. The high end of the market may be behaving very differently from the low end. And so I could see that I’m buying in the bottom quartile and if I go from 1,000 square feet to 2,000 square feet, I can see where the 2,000 square feet homes are selling in the next quartile. But I can also see that I’m not going to go to the $3 million homes because those guys are on half an acre or a full acre and I’m buying at a quarter acre. So I can see those characteristics in that.
And so I was able to use it when I was shopping for a home, going, “I’m buying in that low place and I want a place where I’m going to be able to invest and add value to my home.” And so using those four price range segments is really powerful. Sometimes you might look and you see, like I’m buying in the bottom quartile, and it’s like if I want to move up a price range, what’s the days on market in that price range? Is it suddenly 180 days or is it seven? Those kinds of things that we can use in every zip code in the country.

Dave:
That’s great insight. We talk on this show a lot about the differences between different geographic markets and I do want to ask you about that and how different markets are behaving differently. But to your point, the further you can refine your analysis, the better. Even within a given market, so you’re in the Bay Area and we know that that’s probably seeing a bigger correction right now than Boston is right now, for example. But even within the Bay Area, some segments, some neighborhoods, some houses with three bedrooms versus studios might be performing really differently. And for everyone listening, it just shows that the more detailed you can get in your analysis, the more opportunity you have to unlock those little nuggets of information that are going to allow you to take advantage of value that most people aren’t really doing the legwork to find out. Is that something you preach or talk to people about Mike?

Mike:
Yeah, for sure. It is about how do we make those decisions. For me, I was working with a realtor at that time and my realtor was A, guiding me to a different town. B, “You got to make an offer quick,” and I was like, “Wait, I’m going to count up. Do I have other options here? I may have other options here.” Those kinds of decisions that allowed me to make that informed insight better. And it’s really stark sometimes. I like looking at days on market by price range. So you go, “Hey, I know down the street that house has been on the market for six months.” And then when we say, “Oh yes, but in your price range, it turns out moving in 21 days. If you want to get this, you want to act quickly.” So we do that all the time and when we craft the data that we do, it’s about what problems are we trying to solve here and there’s definitely ones I’ve lived.

Dave:
Yeah, absolutely. I like that story. I bought a short-term rental a few years ago and was able to do something similar. I tell this story a lot, but basically I could see that prices for anything three bedrooms and under were just flat and they were in town, they were just building tons of one and two bedrooms, so that probably means that they might go down with an increase of supply. Whereas no one was building big homes and the prices of four bedrooms and up or just going up and up and up and up. So I only targeted my search and created my buy box around finding those four bedrooms. So just two data nerds talking about the importance of data analysis, but I really do think it matters that when you’re looking in your market, don’t just stop at saying, “Okay, I understand at an MSA level what I should be looking at.” Try and learn everything that you possibly can, and you might just uncover some of those valuable tidbits that we’re talking about here.

Mike:
Yeah. I’ve observed that the great investors, the long-term investors, a lot of them know this stuff in their bones for their local markets. They’re like, “That’s the bargain. That one is the rare one.” But most of us either don’t yet know it in our bones or we have to convince other people. And when we convince other people, you can’t just go, “I know it, I’ve been doing this, trust me.” So the data is very often convincing other people who may be super scared right now. So if you’ve got an investor or I had a hard money lender call me the other day and she says, “I’ve worked with these investors before. They buy homes in Denver. I’m nervous about lending to them in Denver right now. What do we know about Denver? I’m afraid the market’s tanking.”
And I said, “Well, let’s take a look. A, we know that Denver slowed faster than most markets last year, but B, it’s actually recovered very quickly right now. There’s fewer homes on the market than you would expect.” And so she was suddenly like, “Oh, maybe this is an option.” We looked at the four price range segments that her investor clients were looking at and it was a real good move and I think a 750K range to $1.4 million range next step up. And so we were able to look at that and she was just operating from fear. She wasn’t going to lend the money but she was like, “Let me check with Mike and see,” and so we dove in and it was a really insightful check for her. And so for the operators, they needed to convince her to do the deal.

Dave:
Yeah, that’s a perfect example. And so it’s not just investors, but even real estate agents probably need to be talking to their clients about this. Lenders, everyone.

Mike:
Yes.

Dave:
All right. Well now hopefully Mike and I have beaten this into your head that you should be understanding your market as well as possible. But Mike since I have you here, I do want to understand, because you are one of the foremost authorities on the housing market, just got to get your take on, let’s start at the national level. What do you see going on right now?

Mike:
So the biggest surprise of the year has been, and it was really between the first and second week of January, we could see a real shift in buyer demand across the country different from the third and fourth quarter last year. And we were going into January assuming that inventory would keep building, we’d have slow buyer demand, rates were still on the sixes, we would still have that. And it suddenly didn’t happen. So people were buying. And so there are 410,000 single family homes available on the market around the country right now, only 410,000. Now last year at this time at the peak of the crazy pandemic nuts, it was 260 or something like that. But normally there’s like 800,000 900,000, a million single family homes on the market.

Dave:
So less than half, something around half, 50%?

Mike:
Less than half. Exactly. And so that was a big surprise. So the first observation is that it is significantly tighter inventory with greater demand than we expected for sure. And I don’t know anybody who was going into January going, “Well, people are going to be buying this spring.” And so that was really noticeable.
The home prices, we have several indicators of W where home prices are and depending on how you want to measure them, where they are and where they’re going to close in the future. Two of our three indicators there are lower than last year at this time, so by a couple percent lower than last year at this time. So what that means is home prices dropped in the third and fourth quarter last year. They’re not dropping now, but we’re going to see a lot of headlines for the next several months of, “Home prices are down,” because they’re down over these really strong comparisons of the first half of last year. And so first half of last year prices spiked up and then they receded back down pretty quickly.
And so the yearly comparisons are they’re down, they’re down just a touch from last year. And what it shows us though, these are homes that are on the market now, new listings now, each week where are the new listings priced? And so those are down a little bit from last year at this time, but these are homes that will sell in the future. And so they’re on the market now, they get an offer in May, they close in June or July, that kind of thing. And so you can pretty much see through August the headlines are going to be pretty bearish, scary, home prices are down.
And so I think about that from an investor standpoint. My favorite times are when we can be contrarian and bullish. So the headlines are really bearish and as of right now, the market’s holding up significantly better than a lot of the headlines would indicate. And it’s going to be the case through much of this year that the headlines are going to be bearish. Now if economy tanks hard, big job losses, people might stop buying and that trend could back off quickly. But as of right now, there’s significantly better demand in on tight supply than those bearish headlines would suggest. And there’s no signal in the data right now of further downward pressure on prices. So each week, the comparison to last year gets a little worse because it was climbing through middle of June, but there’s not going down now.

Dave:
Yeah, it’s honestly been fascinating and happened faster than I expected personally. And I’m just curious how do you make sense of it? What do you think is going on here?

Mike:
A recovery happened faster than you might have expected.

Dave:
Yeah, I’m just curious I guess two things here. One, why did demand come back? I know mortgage rates for this tightening cycle, at least for now have peaked about in November, and so they were J down in January. So is that why you think demand came back? Or what sort of spurred this increase in activity in Q1 that I was personally surprised by?

Mike:
Yeah, so I don’t know all of it, but I suspect that yes, rates down from seven and a half to six and a half like that makes a big difference. And a lot of buyers are buying down further to five and a half or something like that. And a lot of folks are realizing now that they can buy now and when rates go down in the future, I’ll refinance in the future. And if I’m qualifying for the higher rate now, it only gets better. So I think there’s a lot of that psychology that’s happening. The other thing that’s happening is as of right now, everyone in America has a job, and so employment is really good. And so even if people are worried about the economy and about a recession, they still look to their own pocketbook and they’re like, “Well I’m doing good.” And so that dynamic is still really strong. Now maybe second half of the year that changes, but as of right now that has got to be driving a lot of it.
So we have surprisingly strong economy. We have rates that are somewhere lower. You also have this big demographic of millennials at their peak earning and home buying years who’ve been getting screwed for three years during the pandemic by big cash buyers, by the boomers. And so now that we have a little bit more inventory than we did last year, it’s not a lot, but it’s more than last year, it’s at least a little less competition than it was last year. And so some of those folks are saying, “I finally get an opportunity where I don’t have to go into a massive bidding war. I can just go and so I’ve been shopping for two years and maybe now is my opportunity.” So I think you get all three of those things happening and it turns out that people are less afraid of economic turmoil than those of us who spend all day on Twitter.

Dave:
Yeah, that’s right. Yeah, exactly, obsessing over macroeconomic indicators.

Mike:
Yeah.

Dave:
Yeah, it’s so interesting. We talk about it from a investor perspective, the lack of competition, and there’s still competition, especially in some markets, but a decreased level of competition as you said for investors is a benefit. But I imagine that that’s probably even more dramatic for home buyers because as investors it’s a numbers game, but for home buyer, the value of being able to actually go and see the house that you want, that you might spend 20 or 30 years in before you put an offer in, is probably very high. And I think it’s hard to quantify that, but it’s a really good point that that really might be pulling people into the market.

Mike:
Yeah. You can also see the less competition, even for investors, we can see that the mega investors, the big Wall Street funds, the ones that own 1000s of homes, their purchase rate is down 80% year over year. The I buyer’s purchase rate is down like 90%. So the big money competitors are on the sidelines. The mid-size investor operators, mid and large size, they’re only down a little bit, they’re still basically doing business. And then the small size, the individual ones, are down. Mortgages at 6% pencil out less often than mortgages at 3%, and so the opportunities are tighter for the individual level investors. And so those are off some, but you really see the folks … And so that means we’re not competing with the big dollars right now and the big I buyers and you can feel that opportunity in a lot of markets.

Dave:
That’s really interesting. It kind of makes sense to me honestly that it’s hard for the big ones to do programmatically. They need to do it at such scale. Whereas from everything I hear about the market is people are finding good deals, but it’s taking a lot of offers, working with sellers, identifying motivated sellers, it’s probably hard to do at scale for those big guys, but the medium and small-time investors, many of whom listen to the show, who are really hustling, might be able to find some better deals, which is hopefully encouraging for everyone out there.

Mike:
It feels like those are the folks who you take the mega money out, the money that existed only because of 0% interest rates, you take those out of the market and the people who really are operator investors, they’re still doing business and it’s hopefully a lot more efficient and less nutty kind of market than we’ve had in the past.

Dave:
I have two inventory related questions for you because you are always talking about inventory and you know it better than anyone. So two things. One, let’s talk about new listings. So this is a measurement of how many homes just get put onto the market for sale. And for reference, I think last time I saw they about down 20% year over year or somewhere in that ballpark?

Mike:
That’s right, yeah, about 20% fewer homes getting listed every week than were listed last year at this time.

Dave:
And so for everyone listening, that basically means, especially coupled with the relatively higher demand than I was expecting at least, is leading to that really low inventory that Mike was alluding to. So there’s a lot of theories, I won’t lead the witness here, so what do you think is going on with new listings and why are they down?

Mike:
So there’s a few I think pretty direct reasons. One is that the normal part of inventory would be I’m moving up or I’m moving down and so if I’m going to buy my next house, I’m sell my first house. And over the last decade we’ve had this phenomenon where we double up. Mortgage rates are 3%, I’m going to buy my next house and keep my first house because I can do two mortgages and now I have an investment property. And so we’ve taken a lot of homes out of the active inventory and just kept them as investment properties over the decade, like eight million homes over the last decade have done that. And so now with everybody at a 2.8% or 3% or lower, it’s really hard even if you’re moving to let go of that existing loan. So that’s one thing. And we also know that there’s a lot fewer moving happening, so they’re simply like, “I’m just here for a while.” And so you have that part of what would normally be creating inventory isn’t happening, we’re just holding onto them cheap. They’re cheap forever, I’m holding onto them.
The other thing though, there would be a couple other places where you might find inventory come. One would be investors who are saying like, “Oh, cost of money is up. These properties no longer are penciling out for me, therefore I’m going to unload them.” And so in a slowing economy or in a rising rate environment, one place we might expect inventory to come from would be from investors. And it turns out none of them are selling yet, not even the big ones who’ve stopped buying. So no inventory yet from any of those guys.
And then the third place you might find it would be distressed inventory. So recession, I lose my job, I can no longer make this mortgage payment, I got to sell the house. And when a recession hits, you think about like, “I’m out of work for 90 days. Now I stop paying my mortgage for 90 days. Now I’m in the foreclosure process.” It’s like 6, 9, 12 months before that inventory comes to market and we don’t have job losses yet. So there’s none of that inventory. So there’s no distressed inventory, there’s no investor inventory, and there’s very few of the people who are moving. And even if they are moving, a lot of them are still holding onto their existing place. My brother is moving to Pennsylvania from DC to be take care of their in-laws, and they’re keeping their house in DC because it’s on the Metro and it’s got a 2% mortgage rate and, “We’re just going to keep that thing forever.”
So you have all three of those phenomenon happening at the same time. So all we have are a little bit of those life events, divorce and job change and, “I’ve got to sell this one to put the down payment on the next one.” Those are the things that we see. But even selling your house because you got to move for a job, fewer people have to move for jobs these days. So all of the things are leading us to have significantly fewer inventory, especially relative to the amount of people who want to buy them.

Dave:
Yeah, it seems like given your analysis there, which all makes total sense to me, it doesn’t sound like it’s going to shoot up anytime soon. These seem longer-term trends. Of course, as you’ve caveated and said several times, major job losses, big recession second half of the year could change a lot of this. But do you see it continuing?

Mike:
There are no signals anywhere in the data of any surge in inventory. There’s a lot of the YouTube class that talks about housing crash and those kinds of folks, and they’re always looking for like, “Oh, here comes the inventory,” and there’s no signals anywhere in the data yet that that’s coming. I could imagine more homes on the market. We have a slowdown, you have job loss, we can imagine when there would be more inventory coming. I was expecting it to happen already this year. It grew last year. So you can imagine, especially in a recession, that we would have more inventory.
My gut says that because the people who have rates super low, even if when you’re losing your job, you’re going to fight like hell to hold onto that, which is the complete opposite from the 2008 time when you had lousy terms, and so the first thing you do is walk away from that when you lose your job. And so my gut says that even in a hard recession, we still don’t get that much distressed inventory. We still don’t get that much investor selling. But a gradual, especially if rates stay in the fives or sixes, that means that over time we get a little bit building that is slightly less affordable to hold, so I sell it. You get those building over time. So yeah, I see it as a multi-year thing, and we’re watching for all of the signals. Where are they coming? I just don’t see them.

Dave:
Okay, great. That’s super helpful to know. It’s a very, very good analysis and everything you’re saying makes sense to me. I have one last question for you. I get this question all the time as I’m guessing you do too, and we’ve hit on pieces of this, but let me just ask you directly. Can housing prices decline when inventory is low?

Mike:
The answer is yes, housing prices can decline when inventory is low. The supply/demand curve can find a new equilibrium at low inventory. What we are finding now is that demand is sufficient, that the low supply is keeping a floor on prices from falling. You see if prices fall a little bit further in Phoenix and suddenly cap rates go from four to five, there’s money there for that. If they go to six, they’re buying everything. So you can see, especially in that investor buy box range of 150 to 400, right now there seems to be a lot of capital ready to buy those anytime there’s a bargain coming in there.
And I actually have on my podcast that with Altos, I talk with investor types and I say, “Do we see that investors are going to exacerbate a downturn or are they going to put a floor in? Are they going to sell because they’re panicking or are they going to buy because they have cash on them?” And that’s like a question that I’m interested in other people’s takes on. As of right now, it looks like the cash is putting a floor on that. And so the answer is home prices can go down with low supply and low demand, it happened last year, but there seems to be a lot of cash and a lot of momentum that is keeping a floor on prices given the current level of supply.

Dave:
Got it, thank you. That’s a super helpful answer and I think people should really think about that, especially if they listen to some people on YouTube like you said talking and obsessing about inventory. It’s helpful to know what it actually means for housing prices.
All right. Well Mike, thank you so much for joining us. This has been a pleasure. Where can people find you if they want to learn more?

Mike:
So they can follow me on Twitter, Mike Simonsen, they can watch our Altos Research YouTube channel. Every Monday we do videos with the data, like here’s happening across the country. And so both of those places, Altos Research on YouTube and Mike Simonsen on Twitter or LinkedIn. And then go to AltosResearch.com and you can check data and connect with our team, especially if you’re like, “Huh, I need to get data from my local market,” that’s what you do.

Dave:
All right, great. Well, thank you, Mike. We appreciate it and hopefully we’ll have you back sometime soon.

Mike:
Looking forward to it Dave, thanks so much.

Dave:
Big thanks to Mike for joining us for On The Market, I really enjoyed that conversation and think that there’s a lot to learn from Mike. His take on the market is obviously really important, but I think the beginning of the conversation where we talked about the importance of data and learning how to segment data for your market is something that will benefit you for a lifetime of investing if you’re into that. If you start just taking a little bit of time to look at how different trends are going on in your market, not just at a level where you could say rents went up in Miami or whatever, if you could identify that rents for one bedrooms or two bedrooms are differing than studios, it can really help you make decisions and refine your buy box in a really significant way.
And so I encourage you all to do that, and I did just want to provide you with a couple of resources where you can find that sort of information. So Mike’s company obviously, Altos Research, does provide a lot of this information. Some of the big MLS providers like Redfin and Zillow and Realtor.com also provide pretty good up-to-the-week data about local markets, so you could check those out. And I’d also encourage you to look on BiggerPockets. I pretty much about once a quarter put out rent reports that break down rent trends, not just by market, but within a market one bedrooms versus two bedrooms, single family homes versus apartments. And so you can start to learn and get the data for some of these sub-sectors of your individual market. So I encourage you all to check those out. Not all of Mike’s data is free on Altos, but they do provide a lot. The other resources that I cited, like Zillow and Redfin and BiggerPockets, are free. So you could check all of that out.
Thank you all for listening, hope you enjoyed this episode. If you did, one of the things we really benefit from on this channel is people sharing with their friends the episodes that they like. So if this is one that you really liked, please go ahead and share it on social media or just with an individual you think would benefit from this episode. Thanks again for watching, we’ll see you next time.
On The Market is created by me, Dave Meyer, and Caitlin Bennett, produced by Caitlin Bennett, editing by Joel Esparza and Onyx Media, researched by Puja Gendal, and a big thanks to the entire BiggerPockets team. The content on the show On The Market are opinions only. All listeners should independently verify data points, opinions, and investment strategies.

 

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