I hadn’t seen anything from Ivy Zelman online in a while so was very happy to see this. Ted Oakley of Oxbox Advisors interviewed Ivy Zelman, CEO of Zelman & Associates, on November 17, 2022.

Ivy became famous for accurately calling the top of the real estate boom in 2005 and last year she was the first mainstream analyst to raise a red flag about the U.S. housing market.

Below I’ll put the video of the Ivy Zelman interview and then I’ll pull a few quotes and all of her graphics from the interview.

Great stuff!

Ivy Zelman Video Interview

Ivy Zelman Quotes & Graphics

“… but if we just looked at the October time frame year-over-year monthly payments for a new home we’re up over 60%.”

“I would say that October just plunged. Year over year orders were down 46%.”

“The West is down over 80%.”

“The spec inventory for the new home market is pretty close to record highs.”

“… we could clear the inventory probably after the first half of 2023 and start to see a little bit of relief on the pressure that we’re seeing in the market.”

“Incentives are just skyrocketing and I think that the soup du jour is mortgage rate buy downs.”

“Based on our survey for October we’re looking at seasonally adjusted, annualized price declines of about 12% nationally.” (Net price decline for new houses.)

“… we are starting to see a moderation in land pricing, still inflating double digits, but not anywhere near the rate that we’ve been seeing.”

“… we would expect that the land sellers will start to capitulate.”

Build-for-Rent; “… it’s been a fortunate distribution channel for the production builders.”

“the prevailing rate – if you look at the correlation to existing home sales – the overall correlation is extremely tight going back historically.”

“… the same magnitude of decline, it’s really has been fast and furious.”

“In prior recessions, we got to 3.3 – in the 1991 downturn and the GFC. So if we just said, “Okay let’s look at a bear case” what would that bear case look like? And we’d say that’d be about another 20% decline in overall existing home sales from current levels.”

 “We would need to see a pretty substantial decline in price to get back to sort of normalizing affordability – probably in about the 20% range in order to get to a trend line.”

“almost 50 percent locked in below 3.5%, so we call it the “Stuck” factor.”

“Mobility which had been surging as a result of the Covid… we’re already starting to see mobility through post office data show that it’s decelerated back to pre-Covid levels for the top 15 destination markets.”

“I think that builders are citing that half of that (cancellations) is from just cold feet versus affordability so this isn’t just affordability it’s people that are hesitant to buy homes at peak pricing.”

Residential. “… we bottom out by the end of the first half of 2023… barring no major changes in the economy.