In the American housing market's labyrinth lies a secret treasure trove of potential homes that could transform the industry. This hidden housing supply is vast, underutilized, and largely unseen by traditional real estate mechanisms. Why does it exist, and how can we unlock it?

Amanda Orson, CEO of Galleon, a direct-to-consumer real estate marketplace, has been shedding light on this shadowy inventory. "There's a massive amount of homes that people would sell for the right price but haven't listed," she explains. "This hidden market is why those unsolicited door knockers and random investor texts keep coming—they wouldn't do it if it didn't work."

The numbers back this up. According to Orson, the visible inventory on the Multiple Listing Service (MLS) is just the tip of the iceberg. While around 700,000 homes were listed on the MLS as of last year, her research indicates that a staggering one in ten homeowners would sell if the price were right. This equates to millions of homes sitting in the shadows, waiting for the right offer.

The traditional MLS process is a high-friction experience reserved for those with compelling reasons to sell, such as job relocations, family changes, or financial necessity. For everyone else, the hassle and cost of listing are deterrents. Orson recounts her experience flipping homes in Philadelphia: "The first time we sold one, it was like a punch in the gut—almost 9% of the sale price went to fees, wiping out our profit."

Additionally, the deprecation of Zillow's "Make Me Move" feature in 2018, which allowed homeowners to list their homes at aspirational prices, removed a low-friction avenue for potential sellers. The National Association of Realtors (NAR) rules require prioritizing MLS listings, making alternative listings less visible and harder to access.

So, how do we bring these hidden homes to market? Galleon’s approach is to reduce friction and increase visibility. Their platform lets homeowners list their properties quickly and easily, bypassing traditional barriers.

One significant opportunity lies in technology. PropTech, or property technology, is poised to revolutionize how we buy and sell real estate. TechNest, the PropTech Podcast, highlights how founders and investors use technology to uncover these hidden gems. Host Nate Smoyer states, "It's about how we live, not just how we make money in real estate."

Despite the technology, the human element remains crucial. Orson shares a personal anecdote about selling her home in Connecticut using the now-defunct Make Me Move feature. "I put my home up on a Thursday, had multiple full-price offers by the weekend, and closed the sale for just $750 in legal fees within 30 days," she recalls. "It was a lightbulb moment that highlighted the inefficiencies in the traditional process."

The hidden housing supply represents a massive opportunity to alleviate the current inventory shortages plaguing many markets. By leveraging technology, reducing friction, and making policy adjustments, we can bring these homes out of the shadows and into the hands of eager buyers. It's time to unlock this potential and transform the housing market.

As we look forward, the question isn't just how we buy and sell homes but how we live in them. And perhaps, in the process, we'll discover that the real estate market's biggest secret was hiding in plain sight all along.

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Slabtastic: In 2023, 72.4% of new single-family homes were built on slab foundations, up from 45.8% in 2000, with the largest increase of 3.9% from 2022 to 2023. Homes with full or partial basements decreased by 3.0 pp to 16.6% in 2023. In colder regions, most homes have basements, with West North Central at 63.9%, New England at 62.1%, Middle Atlantic at 48.1%, and East North Central at 48.0%. The average finished basement area was 1,113 sq. ft. nationwide. Slab foundations are prevalent in warmer regions, with West South Central at 96.9%, Pacific at 86.5%, South Atlantic at 83.3%, and Mountain at 52.9%. (NAHB)

Who Needs Permits? An FBI raid of KSK Construction tied to NYC Mayor Eric Adams uncovered an illegal 12-story, 157-unit residential project at 280 East Houston St. in the East Village, which lacked proper permits. The oversight was noticed after five stories were built. The investigation revealed KSK owner Erden Arkan raised nearly $70,000 for Adams' campaign in May 2021, with suspicions of foreign money involvement. Additionally, developer Weihong Hu raised tens of thousands for Adams while securing city contracts worth millions, and Rybak Development failed to disclose a 2019 event raising at least $71,000. KSK spun off from Kiska Construction 20 years ago, specializes in luxury condos. (TRD)