Melody Wright, author of M3 Melody Substack, returns to the show for an in-person episode to discuss the frozen spring selling season and reveals disturbing signs of distress bubbling beneath the surface, including mortgage delinquencies rising at the exact time of year they should be falling. She exposes the "rage delisting" phenomenon where stubborn sellers refuse price cuts despite a massive inventory buildup, explains why the housing shortage narrative is a myth perpetuated by builders seeking a bailout, and warns that prime mortgages are now showing weakness for the first time. Melody argues that a 35-50% price correction is needed for median household income to afford median home prices, with the first wave of 10-12% likely over the next couple years. She reveals a massive shadow inventory wave from boomers that could add 20% more homes each year for the next decade, discusses how investors are fire selling (one investor dumping 300 rentals in a single market), and predicts the back half of 2026 could be "really ugly" as forbearance programs expire. Her advice: sellers should cut prices quickly to avoid cutting further, while buyers should stay patient because "the supply is coming."

Links:

YouTube; https://www.youtube.com/@m3_melody

X: https://x.com/m3_melody

Substack: https://m3melody.substack.com/

Timestamps

0:00 Introduction - Melody Wright returns, spring selling season

1:59 Housing market assessment - "Take three of another year frozen"

5:28 Distress bubbling under the surface

8:15 Why the shortage narrative is so pervasive

11:46 Tracking 86 markets now

15:05 Most worrisome areas - The delusional northeast

16:11 Boomer stubbornness and shadow inventory wave

16:38 How big is the shadow inventory? 20% increase for next 10 years

18:22 How far do prices need to correct? 35% to 50%

20:42 Warning signals

24:25 Most important thing overlooked

27:36 Base case - 35% to 50% correction over significant time

28:46 Spring season warning

29:54 Back half of year could be really ugly

30:17 Shortage of affordable homes because they're mispriced

30:58 Advice for sellers - Get real appraisal, cut quickly

32:36 Advice for buyers - Stay stubborn, wait for math to work

33:04 How does this feel different from 2008?

36:45 Who's buying now if institutionals are fire selling?

37:57 Parting words - Patience for buyers, supply is coming