50% Of The US Will See Falling Home Prices This Year | Reventure Consulting

**Nick Gerli** (0:00)
Housing market correction takes years to play out, often five to six years to play out, because home sellers, even when the market has shifted down clearly, home sellers have this period of denial. And that period of denial will last like years for certain sellers before they cut the price. But incrementally, the market value gets adjusted down, down, down, down. And then over five years, you find prices could be down 25 percent. So that's kind of the situation we're in right now in about half the US. In half the US., we are in the housing correction. And I think by the end of the year, half the US will be negative on price growth year over year.

**Adam Taggart** (0:46)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Well, 2025 is here, and the US housing market is still in an injured state. Will we start to see some healing this year, or may things take a turn for the worse? Today, we've got the good fortune to be joined by housing analyst Nick Gerli, founder of Reventure Consulting and creator of the excellent Reventure app. Nick will walk us through his latest outlook on the US housing market and share a number of his charts with us. Spoiler alert, the weakness we've seen grow in previously hot markets like Florida and Texas are now starting to spread to key states like California. So what is that bode for the rest of 2025? Well, we'll hear it straight from the horse's mouth himself. Nick, thanks so much for joining us today.

**Nick Gerli** (1:33)
Great being with you, Adam.

**Adam Taggart** (1:35)
Hey, Nick, I'm very excited for this. You're always such a wonderful guy to talk to you about the housing market, one, because you're smart, but two, because you bring a lot of data to the discussion. And in today's discussion, I'm sure we'll be no different. Before we get into all the nitty gritty of the details, just high level, what's your current assessment of the US housing market?

**Nick Gerli** (1:55)
Yeah. So the housing market is still very overvalued. It's still in the biggest bubble of all time on a national basis. Prices are about 30 percent overvalued on a national basis. However, we are starting to see cracks form in many different areas of the housing market. We now officially have prices dropping in four different states on a year-over-year basis. And by the end of 2025, that's going to grow to 20 different states with price declines, according to my forecast, which ultimately will be good news if you're a prospective homebuyer or investor out there. More affordability is coming to the housing market in 2025 So that's good news.

**Adam Taggart** (2:33)
Okay. And I think that is the silver lining here that we want to, as we talk about this. So you and I have talked about the housing market for many years, and you have been predicting that prices will eventually correct. You've been warning about how overvalued the market has become. And we both have spent a lot of time talking about how it's hard not to imagine lower prices in the system in terms of the way that this thing corrects versus average incomes catching up to justify today's multiples. It's much more likely that we're going to see some cooling off and downward momentum in prices. And of course, if you're a homeowner, that's scary to hear, right? And certainly there will be pain in there and probably pain for a lot of people. But there's a lot of pain that's being shouldered right now by the millions of aspiring homeowners who are either being forced to stretch to dangerous levels to get into a house, or who just can't get into a house. It's just housing has become unaffordable for them. And the fact that housing may start to become more affordable, that is a public good, and that is hopefully the silver lining that folks can focus on if indeed we end up getting this correction that you think has actually probably started. Real quick, so like Nick, two things. If you can just give a quick overview as to what got us here, like what were the key drivers that got housing prices so inflated?
And right before we turn to the camera here, we were talking about how some of these things are actually still going on. There's some artificial support for the housing market, previous policies, whatnot, that are actually still going on, even though the market is trying to correct at this point. So how did we get to this, what did you say, the biggest bubble of all time in the US housing market?