Happy first day of fall! Today on Newsmakers at Noon, we welcomed Amy McLeod for Real Estate Insights, and the housing market gave us plenty to unpack beyond the usual conversation about prices and interest rates.
Amy brought us up to speed on the latest market stats, but one of the bigger themes was that the negotiation is no longer just about price. In today’s market, buyers and sellers may be negotiating everything from closing costs and rate buydowns to repairs, concessions and timing. And for sellers, there’s another trap: “chasing” the market down. Starting too high and repeatedly cutting the price can leave a property following the market instead of getting ahead of it.
That led perfectly into our discussion of Ken LaCorte’s Elephants in Rooms episode, “Housing Isn’t Broken. It’s Working as Designed.” His premise gave us a different way of looking at the affordability crisis: America has spent decades encouraging homeownership as a way to build wealth, while simultaneously making it increasingly difficult in many places to build inexpensive new housing.
That creates an uncomfortable tension. Would-be buyers benefit from lower home prices, while millions of existing homeowners have a financial interest in maintaining – and increasing – the value of the homes they already own. At the same time, homeowners sitting on 2–4% mortgages have little incentive to sell and replace them with much more expensive financing, contributing to the inventory problem.
We also talked about why housing isn’t one problem with one fix. Mortgage rates, zoning, land availability, permitting, building requirements, taxes, insurance, demographics and local employment conditions all play a role, and the housing market in one city can look dramatically different from the market just 100 miles away.
And perhaps the biggest question of the hour: Can housing remain a strong wealth-building investment for one generation while becoming substantially more affordable for the next? That’s a much harder question than simply asking how we get home prices down.
Links from Today’s Show
Watch “Housing Isn’t Broken. It’s Working as Designed” on YouTube
Full Episode and Transcript — Buzzsprout
