BiggerPockets Real Estate Podcast: July 2025 Housing Market Update – A New "Correction" Begins
Episode Overview
In the July 2025 episode of the BiggerPockets Real Estate Podcast, host Dave Meyer delivers a comprehensive mid-year housing market update. Focusing on the transition to a buyer's market, Meyer analyzes inventory trends, buyer demand, home price trajectories, and the potential for a market correction versus a crash. This detailed summary encapsulates the key discussions, insights, and conclusions presented in the episode, complete with notable quotes and timestamps for reference.
1. Introduction to the Buyer's Market
Timestamp: [00:00]
Dave Meyer opens the episode by announcing the arrival of a buyer's market, urging potential investors to seize current opportunities:
"The buyer's market is here. So if you've been sitting on the sidelines saying you can't invest again until the market is better, no more excuses. The water is warm. It is time to dive in." ([00:00])
He emphasizes the importance of understanding the current market dynamics to make informed investment decisions.
2. Inventory Trends: Supply-Side Shifts
Timestamp: [02:15]
Meyer delves into the critical topic of inventory, highlighting a significant year-over-year increase:
"General inventory, which is the number of properties that are for sale at any given time, is up 15% year over year. That's a pretty big jump in a single year." ([04:30])
Key Points:
- Historical Context: Inventory levels have been rising steadily since the pandemic, though still below pre-pandemic norms.
- Regional Variations:
- Increasing Listings: Midwest cities like Warren, Michigan (+10%), Cleveland (+7.5%), and Milwaukee (+5%) are seeing more new listings.
- Decreasing Listings: Expensive markets such as Tampa, Florida (-18%), Orlando (-16%), and San Diego (-12%) are experiencing declines in new listings.
- Slowing Inventory Growth: The rate of inventory increase is decelerating, indicating a potential stabilization in supply.
3. Buyer Demand: Contrary to Popular Belief
Timestamp: [08:45]
Addressing misconceptions, Meyer presents data showing robust buyer demand despite prevailing sentiments on social media:
"Mortgage purchase applications... have gone up 22 weeks in a row." ([10:15])
Key Points:
- Mortgage Applications as a Proxy: An uptick in mortgage purchase applications signals increasing buyer interest.
- Steady Rise in Demand: Nine consecutive weeks of double-digit increases in buyer demand.
- Impact of Mortgage Rates: Although rates remain relatively high (~6.65%), buyers are adapting and showing resilience.
4. Home Prices: National and Regional Insights
Timestamp: [14:10]
Meyer provides an analysis of home price trends, both nationally and regionally:
"Nationally, home prices are still appreciating. They are up 1.4% year over year. But that growth rate is falling." ([16:00])
Key Points:
- National Growth: A modest 1.4% year-over-year increase in home prices.
- Above Inflation: This appreciation is below the current inflation rate of approximately 2.5%, affecting unleveraged homeowners more.
- Leverage Advantage: Investors using leverage (e.g., 5-to-1) can potentially outpace inflation despite slower price growth.
- Regional Performance:
- Strong Growth Areas: Detroit, Newark, Cleveland, and Nassau County are among the top markets with significant year-over-year price increases.
- Declining Markets: High-cost areas like Oakland, San Diego, and West Palm Beach are witnessing the fastest price declines.
5. Home Sales Volume: Sluggish Activity
Timestamp: [18:50]
Discussing home sales volume, Meyer notes a concerning downward trend:
"Right now we're at four million or maybe even a little bit below." ([20:05])
Key Points:
- Pandemic Peak: Home sales surged to 6.22 million during the pandemic.
- Current Decline: Sales have dropped to around four million, below the normal level of 5.25 million.
- Economic Impact: Reduced home sales volume negatively affects GDP growth and reflects an unhealthy housing market.
6. Correction vs. Crash: Distinguishing Market Outcomes
Timestamp: [21:30]
Meyer differentiates between a market correction and a crash, alleviating fears of an imminent collapse:
"Housing market is cyclical. Just like every market, the stock market is cyclical, the business cycle is cyclical. These things happen." ([25:45])
Correction Characteristics:
- Price Adjustments: Gradual slowdown in appreciation rates, aligning with historical averages (3.4%).
- Equilibrium Restoration: Balancing of supply and demand as new listing growth moderates.
Crash Characteristics:
- Forced Selling: Rapid decline driven by mass foreclosures and inability to service mortgages.
- Current Status: No significant increase in delinquency rates; foreclosure rates remain low ([23:25]).
Notable Quote:
"If you're afraid of a crash and in a correction you might miss out on a buying opportunity." ([28:20])
7. Foreclosures and Delinquency Rates: Stability in Single-Family Homes
Timestamp: [23:25]
Meyer addresses concerns about rising foreclosures, contrasting single-family and commercial real estate:
"The delinquency rate is about 0.55%. So that's about one in every 200 mortgages." ([24:10])
Key Points:
- Single-Family Stability: Delinquency rates have decreased, currently at 0.55%, lower than pre-pandemic levels.
- Commercial Real Estate Vulnerability: Multifamily delinquencies are up, reflecting challenges in commercial sectors but isolated from single-family markets.
- Data Misrepresentation: Clarifies misconceptions linking commercial delinquency rates to single-family market stability.
8. Investment Opportunities and Strategies
Timestamp: [26:05]
Meyer offers actionable advice for investors navigating the buyer's market:
"The number one way you do that right now is by negotiating." ([33:50])
Key Strategies:
- Negotiation: Leverage the buyer's market to secure properties below recent comparable prices.
- List-to-Sale Ratio: Currently at 99%, indicating buyers are paying slightly below list prices.
- Investor Advantage: Aim for 2-5% below market to maximize investment returns.
- Risk Mitigation: Focus on stabilized properties in good condition to preserve value during corrections.
- Opportunity Identification: Increased active searching for deals as more properties become available.
9. Conclusion: Embracing the Buyer's Market
Timestamp: [35:50]
Meyer wraps up the episode by reinforcing the normalcy of the market's current state and encouraging proactive investment:
"Real estate markets correct, the stock market corrects, there are declines. These are cyclical. But... we are in a buyer's market which comes again with benefits and risks to investors." ([37:30])
Final Takeaways:
- Normalcy of Correction: The housing market is adjusting after years of abnormal growth, not experiencing an unprecedented crash.
- Stay Informed: Investors should monitor regional trends and adjust strategies accordingly.
- Seize Opportunities: Utilize the buyer's market to find and negotiate favorable deals, preparing for future market equilibrium.
Additional Resources and Contacts
Dave Meyer encourages listeners to engage further through BiggerPockets' platforms:
- Website: www.biggerpockets.com
- Instagram: @theDataDeli
- Contact: On BiggerPockets and social media channels for personalized inquiries.
Disclaimer: The content of this podcast is for informational purposes only. All opinions are the hosts' own. Investment in real estate involves risk, and listeners should consult qualified advisors before making investment decisions.
This detailed summary captures the essence of the July 2025 episode, providing a clear and structured overview of the housing market's current state and future outlook based on Dave Meyer's expert analysis.