Home sales dropped in August. Supply hit a decade high. Prices went up anyway. Econ 101 just failed its own final exam.
The textbooks promised us a simple world. More inventory means lower prices. Buyers get options. Sellers get desperate. Markets clear. Everyone shakes hands and goes home to calculate their tax basis.
But here we are. Listings everywhere. Buyers nowhere. Prices climbing like they're training for Everest. The invisible hand isn't just invisible anymore. It's f*cking paralyzed.
Real estate agents are discovering what it's like to have product nobody wants at prices nobody can justify. That's called being a timeshare salesman, but with a nicer car lease.
Sellers listed their homes because someone on HGTV told them this was the moment. Prices only go up, they said. Just slap some gray paint on everything and wait for the bidding war. Now they're sitting there watching tumbleweeds roll through their open houses while Zillow estimates tick upward for reasons that would make a ouija board seem quantitative.
The people who didn't buy are convinced they're geniuses for waiting. The people who did buy are convinced they're geniuses for locking in. Both groups check their Redfin apps forty times a day like it's going to tell them something different. It won't.
This is what happens when mortgage rates price out everyone except people who don't need mortgages. You get supply for the middle class and demand from the upper class. They don't shop in the same neighborhoods. So everything just sits there, appreciating out of spite.
Somewhere right now a 28-year-old with a finance degree is drawing supply and demand curves in his notebook, trying to figure out where he went wrong. The answer is business school, but that's a different article.
The market will clear eventually. It always does. Just not at a price point where anyone reading this can participate.
Photo by Breno Assis on Unsplash
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