This startup has a plan to unlock housing market inventory

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Imagine Warren Buffett knocking on a homeowner's door and offering them $1 billion for their home. They'd sell in a heartbeat, wouldn't they?

While there are around 82 million single-family homes in the United States, only 495,000 are currently up for sale, according to Altos. However, beyond that active listing figure lies a hidden truth: most homeowners have a price at which they would readily part with their property. And for most homeowners it’d be far less than the Warren Buffett hypothetical up above.

That’s why Galleon just launched: a platform where homeowners can "name their number." By allowing homeowners to specify the price at which they would be willing to sell their homes, this platform seeks to tap into the vast reservoir of potential inventory that remains untapped in the housing market.

At least that’s how Amanda Orson, CEO and founder of Galleon, sees it.

“What we’re doing is just giving people that have a home, that would be persuaded to sell it at a certain price, the opportunity to list it in as low friction, as fast, and as simple a manner as possible,” Orson tells ResiClub. “We think that being able to list your home, and to do so within a few minutes is the future. That’s the way the world will move… we’ve long been able to list things on Craigslist or Facebook Marketplace in a few minutes. The time it takes to sell your home, to actually put something on the MLS system and all of the hurdles in between, is so long and so high friction that the current MLS system is just a reflection of the most motivated sellers… As a result the [active] inventory is not reflective, we believe, of the actual inventory available in the market. Ask any broker who has pocket listings, or anyone who has purchased anything off market, or any homeowner who has ever received unsolicited direct mail [from an iBuyer like Opendoor].”

For the time being, Galleon is in its beta phase, and they’re busy collecting “name your number” submissions from homeowners interested in selling (you can submit here).

In total, there are just over 400 listings on the site as of Monday. That number will get much larger, Orson says, over the coming months as they figure out the marketplace and move beyond the “beta phase.”

How will Galleon eventually make money?

Orson says they’ll have software license fees, lead generation to real estate attorneys/settlement agents/ mortgage brokers, and value-added services. Orson anticipates the value-added services will be free for the “retail homebuyer” but not for the “investor class.”

Orson added that: “I just want to emphasize that it will always be free to list, free to browse, and free to interact with a home seller/ potential buyer. That's going to be a core differentiator for us forever.”

This startup believes it has the potential to spur more churn in the housing market. As the platform gains traction, Orson says, it could reshape the dynamics of the real estate industry, providing a win-win solution for homeowners and buyers alike.

"The universe of people that would sell is just a magnitude larger than the universe of people who actually sell," Orson tells ResiClub.

This month, the Federal Reserve Bank of New York released its latest household debt and credit report, revealing that there were 40,120 foreclosures in Q4 2023, marking an increase of 17% from Q4 2022 (which had 34,180 foreclosures).

However, this figure still remains 44% below the number of foreclosures recorded in the pre-pandemic Q4 2019 (which saw 71,320 foreclosures).

For now, at least, this trend appears to reflect the housing market normalizing from the suppressed levels experienced during the COVID-19 foreclosure moratoriums, rather than indicating a significant upswing.

2 ResiClub PRO articles from the weekend:

• 11 studies, 1 conclusion: The U.S. housing market is underbuilt

• Charting the changes in apartment vs. single-family rents across top U.S. metros