New: đź§  Market Minds Issue #089

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America’s Real Estate Market Splits in Two

Source: Axios

Midwest and Northeast Surge, Sunbelt Stumbles

While national home values ticked up a modest 0.2%, zooming in reveals two starkly different markets. The Midwest and Northeast are defying gravity, cities like Cleveland (+4.3%), NYC (+4%), Chicago (+3%). These regions are starved for new inventory thanks to tight zoning laws and physical space constraints. When supply is frozen, even tepid demand can light a fire under prices. Meanwhile, the South and West, specifically Austin (-5.8%), Tampa (-6%), Phoenix (-4%), are buckling under a flood of new inventory.

Climate Fatigue Meets Insurance Shock

Here’s the unspoken factor reshaping behavior: homeowners in climate-vulnerable zones are tired. Not just of hurricanes, but of rising insurance premiums and uncertainty. Florida and Texas are seeing an exodus of second homes. Vacation properties, once a wealth anchor, are becoming liquidation priorities. That’s pricing pressure, squared.

Builders vs. Boomers

Homebuilders don’t get to “wait out the market.” They operate on debt, not nostalgia. That’s why prices are slumping faster in places like the South, where construction is cheaper and faster. Contrast that with the Northeast, where good luck getting anything through zoning boards. Existing homeowners in those markets can afford to hold. And they are.

The 2019 Anchor: Don’t Be Fooled by Price Declines

Even where prices are falling, they’re falling from Everest-like peaks. Nationally, values remain ~46% higher than pre-pandemic levels. So, no, this isn’t 2008. But it is a recalibration. If you bought at the peak in the Sunbelt, you're not holding an appreciating asset, you’re managing a slow-motion correction.

What to Watch: Resilient Mid-Sized Metros

Markets like Minneapolis and Cleveland aren’t just holding steady. They’re the top picks for the summer, according to WSJ/Realtor.com. Affordability and climate resiliency are becoming the new luxury amenities. Watch where institutional money flows next—that’s where the smart money is hedging against volatility.

Why High Prices and Higher Rates Continue to Paralyze Housing

Source: Business Insider

More Listings, Less Movement

Despite rising inventory, the housing market isn't thawing. Pending home sales slipped another 0.8% in June (marking a 2.8% year-over-year decline according to the National Association of Realtors). And that’s with more listings on the market. Sellers are increasingly pulling homes rather than meet the market at a lower price, while buyers are still on the sidelines.

Price Peaks with No Relief in Sight

Inventory is up. Prices are too. That’s not supposed to happen, but it is. June saw home prices hit an all-time high—again. Buyers are not just priced out by rate shocks; they’re priced out by stubborn price psychology. Sellers are still anchored to 2021 valuations, and the market hasn't punished them yet.

Frozen by Affordability, Not Supply

Buyers, particularly younger ones, aren't waiting for more homes, they’re waiting for the math to make sense. Gen Z increasingly sees renting as a rational response to an irrational market. It’s not just a lifestyle choice. It’s a reaction to two and a half years of affordability erosion.

Regional Fractures Are Widening

The Northeast is the only region showing a pulse, up 2% in pending sales. The rest of the country continues to sag: -4% in the West, -0.8% in the Midwest, -0.7% in the South. These aren’t temporary dips; they’re symptoms of a market that’s stalled at the intersection of cost and caution.

Only One Group is Winning

The clear beneficiaries? Homeowners with no urgency to sell. They’re watching appreciation stack on paper, tax-free, while locked into 3% mortgages. Everyone else is stuck in a market that’s moving in name only.

Image War: Zillow Faces Major Copyright Lawsuit Over 47,000 Photos

Source: New York Post

CoStar Group, which owns Apartments.com and Homes.com, just lobbed a legal grenade at Zillow. The accusation? That Zillow is systematically using nearly 47,000 copyrighted photos owned by CoStar to juice its rental listings. And we're not talking subtle infringement. Many of these images allegedly still carry the CoStar watermark and have been viewed hundreds of thousands of times across Zillow's sprawling network.

The Fight Isn't Just About Photos

This isn’t just an IP squabble. It’s a turf war over control of digital real estate. CoStar claims it has invested billions into building what it calls the “world’s largest library of real estate photographs,” hiring thousands of photographers to create exclusive assets. The lawsuit suggests Zillow is not only using these images across its own ecosystem but also distributing them via syndication deals to its "competitors," including Redfin and Realtor.com. That exposes a deeper truth, that Zillow's syndication web is more central to the industry than most admit.

Two Lawsuits in Five Weeks: A Pattern Emerges

This is lawsuit number two in just over a month. Compass recently filed its own legal attack, accusing Zillow of gatekeeping listing visibility. Add these to growing scrutiny around Zillow’s platform dominance and the outlines of an anti-competitive narrative start to form.

What's at Stake? More Than Just Damages

While CoStar is asking for monetary damages, the real stakes are strategic. This could redefine the playbook for digital rights management in real estate. If CoStar succeeds, it won’t just hurt Zillow’s rental arm, it could upend how listings platforms operate, syndicate, and monetize visual content.

Age Meets Beauty

Source: Zillow

This East Marion, NY home is listed at $2.35M is believed to be one of, if not the oldest home on the market.

Built in… yes, 1647.

Just know, there are likely some things to show up on this inspection report.

Check it out 👇

TL;DR (Too Long; Didn’t Read)

America’s housing market is splitting in two: the Midwest and Northeast are seeing price gains fueled by tight inventory, while oversupplied Sunbelt cities like Austin and Tampa face sharp declines. Despite rising listings, affordability—not availability—is paralyzing buyers, with high prices and seller stubbornness freezing movement. Younger buyers are opting out entirely, and only locked-in homeowners are benefiting from the status quo. Meanwhile, CoStar’s lawsuit against Zillow over 47,000 photos exposes a deeper turf war over digital real estate dominance that could reshape how listings are owned and shared online.

Have a great weekend - we’ll see you next Saturday.

Cheers 🍻

-Market Minds Team