Housing Market in Crisis: Nick Gerli Warns the Worst Is Yet to Come

Nick Gerli (0:00)

Housing is now in a multi-year recession. Austin's the biggest housing bust in the US right now. I think we're gonna see even bigger discounts over the next year.

Maggie Lake (0:13)

Hey Nick, thanks for joining us. Welcome to Wealthion.

Nick Gerli (0:15)

Great being here with you, Maggie.

Maggie Lake (0:18)

So we have, you focus specifically on housing and really go deep and look at markets all across the country. And someone said something to me interesting the other day, that the Fed Chair, Kevin Morish, has talked a lot about AI, not so much about housing, hasn't mentioned it that much.

And there's, I think, a lot of concern out there. What are you seeing when it comes to the state of the US housing market right now?

Nick Gerli (0:40)

Yeah, well, housing is now in a multi-year recession. Some could call it even a depression when it comes to sales and demand. So the number of people buying homes in the US just fell below four million annualized in August, 2026 That's roughly at 2009 levels of sales. So the current buyer demand is at great financial crisis levels. And actually when adjusting for the size of the housing stock, demand today is the lowest it's been in 40 years. And so really very few people are buying homes right now. And one of the main reasons is prices are still very high. And of course, mortgage rates have gone back up above 7%.

And so it's a really, really tough market right now for buyers. It's a tough market if you're a real estate professional as well.

Maggie Lake (1:29)

Yeah, gosh, that is...

I mean, if we're going back to those levels, I think we all remember what it felt like back then. What are you seeing in terms of data points that tell you that the situation is that bad?

Nick Gerli (1:43)

Yeah, so the sales numbers are really, really low. I think the other thing we're starting to see for the first time actually is lower prices in some markets.

That's one of the differences between now and 2008, 2009 There was a big drop in prices pretty quickly back then. There hasn't been the big national drop in prices. However, certain markets like Florida, Texas, Tennessee, Arizona, Colorado, we're actually starting to see values drop in these markets. And one thing I do for my job here at Reventure is I travel around the US and go to these local housing markets. I'm finding lots of sellers in these markets underwater and selling at losses from what they bought for three to four years ago.

Maggie Lake (2:24)

Yeah. Listen, nothing like boots on the ground, so we appreciate that. And it's funny as you're listening to this, I remember years ago, someone said to me, real estate's local, right? And I live in New Jersey, I'm talking to you from New Jersey, and it does not feel like the market you're describing, right? Like people can't find a house. You get posts on Facebook all the time saying, I'm looking for something, I'm moving out of the city, I want this school district. Like if you see anything, trying for word of mouth, because it's been that tight.

Is that just sort of top of cycle, it's rolling over, or does this very much depend on where you sit?

Nick Gerli (3:06)

It's a great question. It totally depends on where you are. This is one of the most bifurcated housing markets we have ever seen in US history.

And I'm glad you brought up New Jersey, because that's one of the hottest housing markets in America, particularly some of those suburbs outside of New York City and Northern Jersey, also some of the suburbs outside Philly and Southern Jersey. Prices are still going up 5%, 7%, 8% year over year. And the main reason is there's an inventory shortage there. There simply aren't enough homes for sale. And it's kind of interesting. They talk a lot about the national housing shortage. I'm sure you've heard that.

Maggie Lake (3:40)

Yes, this is one of my questions for you.

Nick Gerli (3:42)

Yeah, the national housing shortage. They say we're 3 to 5 million homes short in the US. And that's often used as an excuse for why prices are still high. But that's actually super regional, right? So New Jersey legitimately has a housing shortage. They don't build many homes. It's almost impossible to get full permits there. I know some builders in New Jersey who say how hard it is. And then the owners in New Jersey tend to stay for a long time after they buy, right?

Conversely, where I am in Nashville, there's building left and right, and people are just... It's like a conveyor belt. People are coming in, moving out every two to three years. A lot of the homes in Nashville I see on the market today were listed, were only bought three years ago, and the inventory in Nashville is literally at a record.