The latest Friday Flash from 1000watt was written by Brian Boero, who I respect tremendously. He's a good guy, a genuine guy, and someone who has recognized that the private listing fight is just businesses fighting for dollars.
But I thought I would have some fun with his dispatch because... well, Brian kind of walks in somebody's shoes. I'm just not convinced that it is a realistic buyer that we might recognize.
This will be a public post, because... well, we're not uncovering some new ground here. Also, please note that I am liberally copying Brian's far better, far more succinct voice. I wish I could write like that. If you don't read the Friday Flash, you should.
Anyhow, let's get this rolling.
In Their Shoes, the Notorious Version
You are 30. You and your partner are looking to buy a house. It's hard. You're going to need to stretch, big time. You live in Chicago where Compass is a big deal, because your job as an accountant brought you there after school. You got a couple of promotions recently. It's time to think about buying a place, since you plan to have kids in the next few years.
It'll be hard, but you want this, and have worked hard for it since leaving school. Hustling. Saving. And watching home prices spiral upward. You and your wife aren't going to buy in some crime-ridden hellhole, not in Chicago, so you're looking at neighborhoods like Jefferson Park. You're watching a small starter home, a modest 3BR/2BA house, soar upward to $430,000.
But this is a dream you will not let die. You'll eat ramen for a year if you have to. You want to buy a house.
You vetted several agents. You chose the one who showed you they were prepared to help you achieve your goal. You trust this person.
Because you're going down rabbit holes a lot these days, you come upon a fight going on inside the real estate industry about home listings.
One side in this fight says Zillow, which you've been glued to for months, is a bully that unfairly uses homes listed by real estate agents to make money from real estate agents.
You don't care about this. Not only is it not your problem, you don't care that much about Zillow. Zillow is just one of four apps that you and your wife use, because buying a house is your obsession. You'll go to any website where a house you might like and can afford is. You just want to buy a house.
The other side in this fight compares marketing homes to marketing designer handbags, Ferraris, or other luxury goods. You think, a Ferrari is cheap compared to this fixer-upper starter home in Jefferson Park. This side says it's OK if you have to look in a bunch of different places to find homes, and you agree because you're already using Zillow, Redfin, Realtor.com, and your agent's own website. Hell, your wife likes scanning Instagram to see if there's something for sale, and you'll check out ForSaleByOwner.com too just in case. You simply want to buy a house.
This side also talks a lot about "seller choice." You don't care about that, because you just want to buy a house. You are pissed off, of course, that these Boomers who bought their house for $35 and a pack of smokes back in 1975 want to sell it to you for $700,000... but that's got nothing to do with websites and such.
The company leading this side of the fight, Compass, is big in your market. You visit their website and see that they're teasing a bunch of "Private Exclusive" homes that you can “unlock.” You click the button that says "See Private Exclusives," only to be taken to a page that directs you to connect with one of their agents. But you have an agent. You see now that it says, "Listings are only private online. All buyers & agents can access in our offices or by contacting Compass."
So you call your agent, who you trust, and say, "Hey, find out what Compass has for sale." And your agent sends you a big list, and makes suggestions on three you should visit. Turns out, Compass puts all the listings in the MLS (in Chicago at least, where you live) for your trusted agent to see. And you have an agent for a reason. One reason is so that he can do some work for you to find a house.
To be sure, there are homes beyond your reach. In fact, all of them seem beyond your reach, and prices keep spiraling up, and you keep hoping that these Boomers will get the hint and realize nobody can afford to buy their homes at the prices they want.
This makes you mad. And the fact that your trusted agent seems unaware of how these insane prices make you mad and how the Boomers have utterly screwed your generation makes you wonder.
In a world aflame with conflict, where 80 year old billionaires are sending off people your age and younger to die in foreign countries so your gas can be $6 a gallon and groceries ever more unaffordable, and you and your 30something accountants are all terrified of losing your jobs to ChatGPT, where so much seems to slip beyond your grasp, these brokers and agents are pissy with one another about one website out of many having or not having listings, instead of focusing on your wanting to just buy a house. That you can afford. Without massive sacrifice.
You think: F these people.
About Shoes
The above story is, of course, Brian's fictional buyer... just told from my perspective as someone who has been tracking Millennials and now Gen-Z for years now.
Brian thinks the PR angle to be concerned about is how these young buyers will hate on us for the listing inventory kerfuffle. I don't think there is a single 30 year old who gives a damn about that.
The Bad PR That Should Concern Us
Taking Brian's scenario as a given, the real bad PR that should concern us is that not only are there homes beyond your reach, most of the homes are beyond your reach. A Ferrari is cheaper than a house, and a Birkin bag is even more affordable. Neither are as important to human happiness as a house, however.
So there's plenty of anger and rage to go around among 30 year olds today, and a lot of the rage is around housing. But it's not about what house they can or cannot see on Zillow. The rage is about the fact that they can't afford any of the houses they do see.
According to Claude, the median income of a 30-yo American is $52,000 per year. Our protagonist has a partner, so let's call it a double income family. I also put them in Chicago, because Brian said Compass is big in their market. Then I put them at the top 20% of 30-year olds in Chicago, with him making $90K a year. (Claude tells me a 30-yo accountant in the top 20% makes $75K-80K, so I'm making this guy a superstar for his age group.) The wife, I made a nurse pulling down $72K (the top end for a 28-yo nurse) a year, so together, $162K a year in household income.
Take-home is around $10,200 a month (about $122,700 a year), and from that this young couple has to pay rent, a car (one car, because Chicago has good public transit), food, energy, mobile phone bills, healthcare, student loans for both of them, clothing... and that's if they don't have kids. They're not living extravagantly, but they are in the top 20% of 30 year olds and their friends are likely as well. The following is normal life for a top 20% income bracket 30 year old.
I had Claude do a rough monthly expenses estimate for this hypothetical couple:
| Category | Monthly | Notes |
|---|---|---|
| Rent (2BR apartment) | $2,800 | Lakeview / Lincoln Park area |
| Car payment (1 leased SUV) | $700 | BMW X3 or similar; she takes the CTA |
| Car insurance | $250 | Full coverage, 1 vehicle |
| Gas + CTA passes | $250 | Split driving and transit |
| Groceries | $900 | Mariano's, not Aldi |
| Work lunches (both) | $680 | $20/day him, $14/day her |
| Dining out | $600 | Evenings, weekends, brunch |
| Health insurance (employee share) | $500 | Two employer plans, couple |
| Utilities | $300 | Electric, gas, internet |
| Cell phones (2 lines) | $230 | Verizon unlimited + device payments |
| Subscriptions | $50 | Streaming, etc. |
| Student loans (both) | $1,000 | ~$90K combined debt, 10-yr repayment |
| Gym memberships (both) | $250 | Chicago Athletic Clubs or similar |
| Clothing | $250 | Professional attire for him, normal for her |
| Personal care + dry cleaning | $325 | His dry cleaning, haircuts, her salon/care |
| Renters insurance | $30 | |
| Total | $9,115 | |
| Remaining | $1,085 | What's left over |
From that $1,085 left over, this couple has to cover any emergencies, medical copays, gifts, car repairs, a broken iPhone, any leisure activities. Catch a Cubs game? Buy her a gift for her birthday? Hahahahaha.
If we take any kind of realistic living expenses, we're looking at more like $500/mo in savings. Now we're at 29 months – almost three years, just for the down payment.
Meanwhile, Boomers make up 42% of all buyers. First time homebuyers have hit an all-time low of 21%.
The 30something buyers saying F these people are not talking about Compass. They're talking about everyone. In fact, they're not actually saying "F these people." They're saying Fuck the System.
No wonder they want to burn it all down.
The Only Moral Narrative That Matters
There is actually only one moral dilemma in real estate today. How do we restore the American Dream of homeownership to the average American, especially to the average American 30 year old, without absolutely crushing the older people who own homes?
There are only three options:
- Home prices fall by 40%;
- Real inflation-adjusted wages double;
- Print money like crazy and make mortgages super-cheap. (Except this directly translates to prices going higher so....)
In the face of this, we're doing false morality plays wringing our hands about theoretical 30-year olds who get pissed that they can't see a home they can't afford to buy on Zillow. Let's stop.
We as an industry probably do need to learn to walk in their shoes. They're just not the shoes much in industry discussion these days, and these shoes hurt like a bitch. These shoes are so uncomfortable that we would do anything to avoid walking in them, including inventing fictional shoes about websites and listings.
Let's stop. We can solve the panic over "hidden listings" with a couple of simple (not easy, but simple) fixes. We can't solve the actual rage over the death of the American Dream so easily. Let's maybe pay more attention to that problem and try walking in those shoes.
-rsh
