Housing could be overvalued by 10% to 35% based on how investors are acting

[Ken M.]

Wall Street Thinks U.S. Homes Are Overpriced

Housing could be overvalued by anywhere from 10% to 35% based on how investors are acting

The stock market is pricing portfolios of American homes at a hefty discount to what houses are changing hands for in the open market. Shares of single-family landlords Invitation Homes INVH -1.26%decrease; red down pointing triangle and American Homes 4 Rent AMH -1.65% decrease; are trading at 35% and 20% discounts to their net asset values, respectively, according to real-estate analytics firm Green Street. 

Invitation Homes’ stock has traded at a particularly large discount 

to NAV since interest rates began to rise in early 2022, but the gap has widened by 10 percentage points in the past year.

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The basic idea is that of you can make the same return on Treasuries with little to no risk, there is no incentive to buy real state.

Some very large Hedge Funds are selling inventory at a loss, below what "current market" is. This of course pushes "comps" lower and affects the selling price lower of anybody trying to sell. Or, the house just sits longer and gets passed over by those buyers that are still in the market.

And no, it doesn't matter that prices are up 2.8% if you can't find comps to support that asking price. 

Don't chase the market to the bottom.

And 

Check current comps before you make that offer and close on that new purchase.