Over the last few weeks, a number of people have told me that, when it comes to their current home, they have a number in mind. They more or less said, "I've already spoken with my husband/wife about it and, if someone were to offer us $X, we would sell and move immediately."

What's fascinating about this is that it's a form of housing supply that generally doesn't exist anywhere right now. Sure, the people I was speaking with would sell and move for a price, but how does something like this actually happen? How do buyers find them?

I suppose it could happen through word of mouth. I now know their prices and so if someone I know were interested in such homes, I could tell them. It is a low probability, but it's still a possibility. Alternatively, someone (an agent or otherwise) might just show up on their doorstep and make them an offer. My dad actually sold his last home this way.

But again, how likely is this to happen? It doesn't seem scalable. And this is why Zillow used to have something called a "Make Me Move" listing. Rather than a traditional listing, it was a listing for, "I don't necessarily need to sell, but if you offered me $X, I would move." For whatever reason, though, Zillow no longer offers this service. Presumably, it's because it wasn't working. Hmm.

Here's how I'm thinking about it.

Today, most housing markets are binary. A home is either for sale or it's not. Sometimes enterprising people manage to secure an "off-market home", but generally speaking the market is binary. If a home isn't for sale, most people don't usually bother with it. Mostly because they can't easily find it.

But market conventions aside, the conversations I've been having suggest that it's actually more of a gradient. On the one side are people who really don't want to sell. Maybe they're never sellers. Let's pretend that the home has been in their family for generations and so to convince them to sell you'd probably have to offer them an absurdly high price and that might not even do it.

On the other end of this gradient are people who are ready to sell today. In an extreme example, they might even need to sell by a certain date, or else. In this case, a below-market price could get them to sell. They are highly motivated and one sure-fire way to increase speed is to lower price.

But for everyone else in between, it is a big unknown gray area where price and desire to sell are, I would think, inversely correlated. As desire to sell increases, expectations around price probably need to come down until they reach a point where the market can bear it and a transaction will occur. This is my hypothesis at least.

But if it's true, and there's a big untapped gray area, then the housing market is a lot bigger than we think it is.

We have spoken a lot over the years about Opendoor. And for a period of time, iBuying seemed like a very good idea. Zillow go into it. Redfin got into it. Everybody was iBuying. But then this year everybody started losing money, mostly due to algorithms that could not contend with falling prices.

It turns out that being a market maker for homes can be a tough business because there is a lag between when you buy the home and when you hope to sell it. And so right now, few people want to be an iBuyer. Zillow no longer does it. Redfin no longer does it. And Opendoor's stock is, at the time of writing this post, down 87.19% YTD.

It is pretty easy to be pessimistic on this space, and that pessimism may be warranted. Though it may not be. My thinking has always been as follows. The process of buying and selling a home will eventually move online. The industry is ripe for change and there is no debating that. The real question is: how the hell do you do it? Everybody, including me in my late 20s, has tried.

Two-sided marketplaces are tricky, because you always run into a chicken-and-egg problem. If you don't have buyers, no seller is going to bother with your real estate marketplace. And if you don't have sellers (i.e. homes), no buyer is going to bother with your real estate marketplace. So generally speaking, the way to build a marketplace is to start with one side, somehow get them on and using the platform, and then open it up to the other side.

And this is exactly what iBuying hopes to do. Today it is largely a tool for sellers. It is a tool that says, "I will give you instant liquidity for your home so you don't have to worry or care about who might actually buy it." This is, of course, convenient for sellers, which is why people have been using it; but it is capital intensive and, as we have seen this year, it transfers some risk to the iBuyer.

In the world of Opendoor, they call this a first-party (1P) transaction. It is them buying directly from sellers. But the larger vision is for Opendoor to become more of a transaction layer and instead just facilitate third-party (3P) transactions. This is currently being done through Opendoor Exclusives and the objective here is to match buyers and sellers directly, so that Opendoor can avoid taking on the risk of actually owning homes for a period of time.

Will this work? I don't really know. But I do think it is exciting and I do think it is the way to think about what Opendoor is ultimately trying to do with their business.

Reminder: I am long $OPEN

Over the last few weeks, a number of people have told me that, when it comes to their current home, they have a number in mind. They more or less said, "I've already spoken with my husband/wife about it and, if someone were to offer us $X, we would sell and move immediately."

What's fascinating about this is that it's a form of housing supply that generally doesn't exist anywhere right now. Sure, the people I was speaking with would sell and move for a price, but how does something like this actually happen? How do buyers find them?

I suppose it could happen through word of mouth. I now know their prices and so if someone I know were interested in such homes, I could tell them. It is a low probability, but it's still a possibility. Alternatively, someone (an agent or otherwise) might just show up on their doorstep and make them an offer. My dad actually sold his last home this way.

But again, how likely is this to happen? It doesn't seem scalable. And this is why Zillow used to have something called a "Make Me Move" listing. Rather than a traditional listing, it was a listing for, "I don't necessarily need to sell, but if you offered me $X, I would move." For whatever reason, though, Zillow no longer offers this service. Presumably, it's because it wasn't working. Hmm.

Here's how I'm thinking about it.

Today, most housing markets are binary. A home is either for sale or it's not. Sometimes enterprising people manage to secure an "off-market home", but generally speaking the market is binary. If a home isn't for sale, most people don't usually bother with it. Mostly because they can't easily find it.

But market conventions aside, the conversations I've been having suggest that it's actually more of a gradient. On the one side are people who really don't want to sell. Maybe they're never sellers. Let's pretend that the home has been in their family for generations and so to convince them to sell you'd probably have to offer them an absurdly high price and that might not even do it.

On the other end of this gradient are people who are ready to sell today. In an extreme example, they might even need to sell by a certain date, or else. In this case, a below-market price could get them to sell. They are highly motivated and one sure-fire way to increase speed is to lower price.

But for everyone else in between, it is a big unknown gray area where price and desire to sell are, I would think, inversely correlated. As desire to sell increases, expectations around price probably need to come down until they reach a point where the market can bear it and a transaction will occur. This is my hypothesis at least.

But if it's true, and there's a big untapped gray area, then the housing market is a lot bigger than we think it is.

We have spoken a lot over the years about Opendoor. And for a period of time, iBuying seemed like a very good idea. Zillow go into it. Redfin got into it. Everybody was iBuying. But then this year everybody started losing money, mostly due to algorithms that could not contend with falling prices.

It turns out that being a market maker for homes can be a tough business because there is a lag between when you buy the home and when you hope to sell it. And so right now, few people want to be an iBuyer. Zillow no longer does it. Redfin no longer does it. And Opendoor's stock is, at the time of writing this post, down 87.19% YTD.

It is pretty easy to be pessimistic on this space, and that pessimism may be warranted. Though it may not be. My thinking has always been as follows. The process of buying and selling a home will eventually move online. The industry is ripe for change and there is no debating that. The real question is: how the hell do you do it? Everybody, including me in my late 20s, has tried.

Two-sided marketplaces are tricky, because you always run into a chicken-and-egg problem. If you don't have buyers, no seller is going to bother with your real estate marketplace. And if you don't have sellers (i.e. homes), no buyer is going to bother with your real estate marketplace. So generally speaking, the way to build a marketplace is to start with one side, somehow get them on and using the platform, and then open it up to the other side.

And this is exactly what iBuying hopes to do. Today it is largely a tool for sellers. It is a tool that says, "I will give you instant liquidity for your home so you don't have to worry or care about who might actually buy it." This is, of course, convenient for sellers, which is why people have been using it; but it is capital intensive and, as we have seen this year, it transfers some risk to the iBuyer.

In the world of Opendoor, they call this a first-party (1P) transaction. It is them buying directly from sellers. But the larger vision is for Opendoor to become more of a transaction layer and instead just facilitate third-party (3P) transactions. This is currently being done through Opendoor Exclusives and the objective here is to match buyers and sellers directly, so that Opendoor can avoid taking on the risk of actually owning homes for a period of time.

Will this work? I don't really know. But I do think it is exciting and I do think it is the way to think about what Opendoor is ultimately trying to do with their business.

Reminder: I am long $OPEN