Earlier last month, Utah’s Deseret News did a stellar job of capturing the seemingly contradictory jumble of signals emanating from the nation’s housing market. At first, K. McKellar’s commentary seemed to be about a 9% drop in Zillow’s stock price. housing market observers might have leaped to a conclusion that such a falloff might have clear local implications—but that wasn’t the case. Rather than being due to any steep dive in activity, it was chalked up to “uncertainty” in the company forecast.
Like all investors, housing market investors don’t like uncertainty. Sometimes it reflects internal management strife—although that wasn’t the case in this instance. It was the contradictory signals from the market that made any forecast almost have to be ‘uncertain.’
Quotes from the article:
“Buyers continue to outnumber sellers.”
• But “price drops are becoming more common.”
• Yet even so, “most homes are still selling above asking price.”
“Homebuyers continue to be squeezed in nearly every way possible.”
• Yet “sellers are pulling back even faster than buyers.”
• Even though “homes are still selling in record time.”
“The number of home sellers who dropped their asking price shot up to a six-month high of 15%.”
• But “the U.S. housing market continues to see record home prices.”
• And “the typical home flies off the market at the fastest pace on record.”
The Zillow stock drop may have reflected an expectation for softer revenues, but it was also “clear” that “people still have a strong interest in moving.” In sum, anyone looking to the national picture to provide additional clarity for our own housing market can choose to see a glass half full or a glass half empty—both are evident.