Celebrity real estate agent Ryan Serhant joins TheStreet to discuss what needs to happen in order for the housing market to cool.
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00:00So tell me, easy ratio, home affordability down, home prices up, if you got called into
00:12a meeting on how to fix this problem, what would your strategies be?
00:21Affordability and pricing is affected in three ways.
00:25It's supply, demand, it's interest rates.
00:27So number one is rates are just too high.
00:30So rates have to come down.
00:32That fix a lot of the problems because it will also fix inventory.
00:36A significant amount of the homes that should be on the market today, I think we're short
00:40like 2 million nationally, are just not coming to market because people can't afford where
00:44they want to go because rates are too high on the next purchase.
00:48So that's why we have a huge precedence in Florida.
00:52We list a home for $6.2 million yesterday, it's fully in contract by yesterday.
01:01It shouldn't be that fast.
01:02That's okay.
01:03Right.
01:04It's fine.
01:05And so I think as you have rates start to come down and as you have incentives get created
01:12in a lot of especially urban markets to create new housing, then affordability will become
01:18much, much better.
01:19There'll be more options for more people and you'll have more sellers go through that
01:23life cycle of moving.
01:24You have a whole baby boomer generation that's saying, I think I'm just going to stay because
01:29your loan is a financial asset.
01:31It's not debt anymore.
01:32But what about the supply side of that equation?
01:35Because I mean, we're here in New York and there are other places that have this problem,
01:39you know, not in my backyard.
01:40They come up with these plans to build more housing because we don't have enough supply.
01:44So how do we address that issue?
01:48Supply is getting better now, you know, even in some of the hottest markets in New York
01:51City and the entire state of Florida, you actually have supply ticking up for the first
01:56time in four years.
01:57So more and more people are coming to market as rates start to stabilize.
02:01So rates coming down, not going down to where we were pre-COVID, but coming to a point where
02:06people say, okay, this is the new normal.
02:09I'm either going to move or I'm not going to move.
02:11That creates more supply, more home builders going into the market as land prices hopefully
02:16start to stabilize and come down, brings more homes to the market and increases supply.
02:21Labor costs, construction costs, you know, material costs, costs of lumber, the cost
02:27of appliances.
02:28As costs stabilize, as inflation starts to cool, all of that is going to help create
02:33more supply.
02:34It's just not going to do it tomorrow.
02:35But we'll look back in a year from now, probably at this moment, we'll also be post-election
02:40and we'll say, okay, that's when it started.