Episode summary
Home Prices Set To Slide 30% | Nick Gerli
Thoughtful Money
· · 1 hr 18 min · Hosts: Wolf Richter · Guests: Nick Gerli
Summary
Nick Gerli argues that the U.S. housing market is already in a broad demand recession, with sales and mortgage applications below 2008 levels even as unemployment remains low. He says inventory is rising sharply in the South and West, making the old “locked-in 3% mortgage” story less relevant, and he expects prices to keep grinding lower in many markets rather than rebounding quickly.
He points to large declines already underway in places like Austin, Southwest Florida, Phoenix, Denver, and Dallas, while saying the Northeast and a few legacy metros are holding up much better. His 2027 forecast map is bearish for Washington, Colorado, Utah, Arizona, Tennessee, Texas, and Florida, but constructive on Illinois, New York, New Jersey, and Connecticut.
Gerli also argues that AI and the return of agglomeration are pulling demand back toward dense, high-income, legacy cities such as New York, Chicago, and San Francisco. He says rents, hotel rates, and company headquarters data all point to those metros regaining relative strength, while pandemic-era remote-work markets like Austin, Nashville, Tampa, and Phoenix weaken.
The long-term risk, he says, is demographic: fewer births, more deaths, and a rising share of homeowners over 75 will eventually add supply and reduce demand, especially in retirement destinations like Florida and Arizona.
Key takeaways
- Nick Gerli says U.S. home sales and mortgage purchase applications are now below 2008 levels, even without a recession.
- He expects prices to keep grinding down in many Sun Belt and Western markets as inventory rises and affordability stays stretched.
- Gerli’s 2027 forecasts are bearish for Washington, Colorado, Utah, Arizona, Tennessee, Texas, and Florida, but positive for Illinois, New York, New Jersey, and Connecticut.
- He argues AI is reviving agglomeration benefits, helping legacy metros like New York, Chicago, and San Francisco outperform.
- Gerli says the demographic cliff is already underway and will pressure retirement-heavy markets with more supply and less demand over the next 10 to 20 years.
Notable quotes
“pretty much every data point is supporting the notion of a housing recession or depression”
“the housing market is mired now in its fourth year of a demand depression”
“there's plenty of supply on the market today. if you're in the south and west in the US”
“We are now in a phase where people are no longer moving to those Sunb Belt states in the same way”
“the demographic cliff is one that we've already stepped off and I don't think there's any going back”
How the episode opens
Pretty much every data point is supporting the notion of a housing recession or depression. Um, and it's it's now breaking through on values in in many markets and locations, but still nationally it hasn't. And that that national aspect is causing people to still kind of maybe disbelieve that we're in a housing market downturn, but folks, it's every data point pretty much is supporting it.
You know, we just need to see uh more sellers convert to higher rate mortgages. And uh if we did have a recession, it would actually cause it to probably hasten in terms of the downturn. But I actually think to put a bow on it, I think like now is a great time if you live in some of these sunb belt states to get out there and make offers.
Welcome to thoughtful money. I'm Money founder and your host, Adam Tagert. welcome you here for a great discussion on the housing market with housing analyst Nick Jurley, CEO and founder of Revenger Consulting.
Nick, thanks so much for joining us today.
Great being here with you, Adam.
Thanks, Nick. So, you know, like to have you on regularly to give people uh an update on how you see the housing market. you track it incredibly closely and folks will see I'm sure throughout this conversation the amazing uh data that you use for your analysis but the amazing tool that you've used uh you've created in the Reventure app uh to help everybody look at data and determine what's happening on in the housing market.
Um I sense this discussion is going to be reinforcement of some things we've talked about a fair amount in your past appearances but also some introducing some new observations as well. So, a little bit of old, a little bit of new.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- housing market downturn
- home price forecast
- mortgage rate lock-in
- housing affordability
- inventory and demand
Watch the episode
Watch “Home Prices Set To Slide 30% | Nick Gerli” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Thoughtful Money, this episode and its artwork belong to Adam Taggart | Thoughtful Money. Octagon is not affiliated with the show; this page is an independent summary.
