Meltdown In Florida & Texas: 2025 Housing Market Forecast | Reventure's Nick Gerli

**Nick Gerli** (0:00)
You know, a lot of people have been frustrated that prices haven't gone down by more, or gone down at all in certain parts of America the last three years. But I'm gonna tell you here, the data is all moving in a positive direction for you as a home buyer, especially if you live in the South and Mountain West regions of America. I mean, there is a lot of reason to hope that 2025 is gonna be a much better buying environment for you.

**Adam Taggart** (0:27)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. Well, this is your lucky week, folks. Today, we've got the good fortune to hear another housing analyst's 2025 outlook for home prices. We're joined by Nick Gerli, founder of Reventure Consulting and creator of the Reventure app. Nick points out that buying a home has rarely been this expensive in living American history. Once before was in 1981, when mortgage rates were a whopping 18 percent. The other time was in 2006, right before we experienced the biggest US housing correction ever. And speaking of corrections, Florida and Texas now seem to be clearly in one. And that weakness looks like it may be spreading into other states. So what does all this forebode for 2025? Well, we'll ask Nick directly. Nick, thanks so much for joining us today.

**Nick Gerli** (1:20)
Great to be here, Adam.

**Adam Taggart** (1:22)
Hey, Nick, look, lots to dive into with you. Really quickly, folks, before I do, just a quick public service announcement. If you're watching this video the day it releases, you're watching it on the last day of 2024 So first of all, happy new year to everybody. Secondly, if you have not yet upgraded to the premium Thoughtful Money newsletter yet, but have been meaning to and you've been hearing me give these reminders that the deadline for doing so is midnight tonight, run, don't walk, in fact, hit pause right now, go to thoughtfulmoney.com, hit the newsletter link at the top of the site there, sign up for the newsletter and upgrade to the paid service so that you can get grandfathered in at the current price before the price goes up on January 1st. And if you sign up now and you get grandfathered in at today's current lower price, you'll enjoy that price for as long as you remain a subscriber. And just a reminder to those folks who signed up last year for the super low $8 a month price, your price isn't going to change either as long as you remain grandfathered in at the lowest, at that price that you initially signed up for, as long as you remain a subscriber, you're going to get that lowest rate. So I want to make sure everybody gets grandfathered in at the best price they can. So again, hit the pause button, go to thoughtfulmoney.com, hit the newsletter link at the top of the site and upgrade to our premium newsletter.
All right, thanks for hanging in there with me on that, Nick. Okay, so lots to talk about what's going on in the housing market there. We got a lot of questions for you, but why don't we just start at a high level. What's your current assessment of the US housing market?

**Nick Gerli** (2:57)
The housing market is frozen right now, entering 2025 Homebuyer demand is at multi-decade lows, and we're finally starting to see housing inventory increase on a national basis, which is good news. However, home prices are still at a record high, and as a result, housing affordability for homebuyers is at near a record low. Homebuyers in America entering 2025 need to spend nearly 40% of their gross income in order to buy a house and afford the mortgage and tax payments. And clearly, that's not a sustainable metric. It's why the homebuyer demand is down, and it's why prices are going to be dropping in quite a few states in 2025

**Adam Taggart** (3:37)
Okay. So you do expect price declines in at least certain states. You have developed a new price forecasting tool for, I think, pretty much every real estate market around the US., and that rolls up to a national forecast. We'll get to that in this discussion, but let's leave that out there as a teaser for folks, because there's a lot of foundational questions I want to clarify with you first before we get there.
So, let's see, I mentioned in the intro that there's been the past couple of years, there's been this back and forth of is housing going to correct or is it going to remain resilient. It has remained resilient, I guess, if you just look at average prices alone, but as you said, it's a frozen market. Transaction volume has cratered. Unaffordability has skyrocketed. So, from a lot of those other metrics, doesn't look like a very healthy market. But there's been a debate whether the market is going to crack or not. In certain states, the debate is over. The housing market has cracked in places like Florida and Texas. So, why don't we start there? Can you tell us about what's going on in the action of those states right now?