ust like last year, I hadn’t seen anything from Ivy Zelman online in a while so was very happy to see that Ted Oakley of Oxbox Advisors interviewed Ivy Zelman, founder of Zelman & Associates, again this November.

I don’t think there’s anyone better at analyzing the real estate market than Ivy Zelman. I particularly like that she’ll occasionally take very contrarian views which makes me trust all of her views more.

See also Ted’s interview with Ivy last year.

Ivy Zelman Video Interview – Nov 2023

Ivy Zelman – Graphics & Quotes

“… what drives population? It’s deaths, immigration and births and those have all been going the wrong way for quite some time now.”

“Once the market started resuming and surprising everyone in the first half of 23 with a very strong spring selling season, the builders put their foot on the gas and they’re starting and accelerating specs.”

“That’s really a question of what they’re going to have to do to move that inventory and I think right now we’re seeing them focused on absorptions over price and they will do what they have to, to move that inventory.”

“We used to see people provide wealth transfers when they died… now parents are helping kids… while they’re still around”

“A lot of those starts are developments that were purchased and, let’s say, financed a year or two years ago, that had already sewers and pipes… Moving forward I don’t expect to see that number accelerate. We’re seeing build-for-rent developers that are trying to sell a lot of communities to builders for the for-sale market.”

”I think there’s a lot of emphasis on the fact that inventory is at the most depressed levels in decades… but what people need to appreciate is, if you look including what’s for sale on top of what’s available for rent, that actually is the right way to consider it.”

“It’s really about the incremental new listings coming to market and therefore it’s the rate of change that will really drives the future growth for the builders.”

“… the narrative is that the housing market is severely under-supplied… Estimates go from 3 million to 6 million… And our view is that we’re more in balance. But in multi-family we believe we’re 30% over-supplied.”

“That’s a backlog that’s massive. It’s like the highest level back to the 70s. So the pressure we’re seeing on lease rates right now is even without those completions coming to market yet. There’s a lot more supply coming.”

“Actually, the October data was negative overall to two and a half to 3%… We were surprised at the level of deceleration.”

Multi-Family. “I think it’s a bit of a standoff. It’s this great poker game and the sellers are like, ‘I don’t need to sell’ and the buyers are like, ‘Well, I don’t need to buy at these values.’”

“But when you get to the small banks, they have a lot more exposure, in the 70% for some, and in terms of commercial real estate multi-family, it’s a very big part, including single-family… challenging times… But I do think there’ll be a lot of workouts, they don’t want those keys back.”

“It also depends on the geographies of how much of their holdings are in the markets that are more plagued with over-supply. So I don’t think we can draw a line across the entire market.”

“I can easily feel comfortable with looking out this year and next year that they’re going to keep bringing inventory to market. The real question mark is what will the price of those units be… We’re kind of assuming a status quo.”

Builder Stocks. “I think we’re going to see that we’re going to have weaker than seasonal trends heading into the end of the year and the spring selling season could actually be more challenged.”

Advice for Young Homebuyers

“It’s really somewhat case dependent… Unless you have to move because it’s needs-based… I would be more cautious.”