The Expert Podcast

• Understand why the housing market is experiencing historic price inflation across all categories: buying, renting, short-term rentals, and leasing.
• Explore the current shortage of over 5 million houses in the U.S. — both rental and ownership — caused by two decades of lagging construction.
• Analogy: The housing market as a game of musical chairs where there aren’t enough chairs (homes) for everyone who needs one.
• How the shortage affects homeowners wanting to sell: If they sell, where will they go? This shortage keeps people hesitant to move, intensifying demand.
• Why building more houses is not an instant fix:
  • Need for land subdivision and legal permits.
  • Regulatory hurdles and infrastructure installation delays.
  • The complexity of converting empty land into legal, buildable parcels.
• Construction rates:
  • About 2 million houses built per year.
  • Only a fraction helps reduce the existing backlog.
  • Catching up on the 5 million-house shortage will take years, possibly 5-10 years, even in the best scenario.
• Price trends and inflation:
  • Home prices expected to continue rising, likely at or above inflation rates (5-7% annually).
  • Mortgage payments are increasing but have not stopped home buying.
  • Difference between a buyer complaint (higher payments but still buying) versus an objection (unable to afford or refusing to buy).
• Comparison to the 2008 housing crash:
  • 2008 was a supply-driven bubble with too many houses and loose lending.
  • Today is a demand-driven bubble with solid demand and a severe supply shortage.
  • Demand-driven bubbles don’t collapse easily because underlying demand is strong.
• Impact of rising interest rates and inflation on affordability and buying decisions.
• Why prices will likely keep rising in the near term despite challenges like inflation, economic slowdown, or recession.
• Factors slowing new construction besides land and permits:
  • Lumber prices.
  • Labor shortages.
  • Material supply chain issues.
  • But these are secondary to the fundamental supply-demand imbalance.
• Real estate market compared to the auto industry:
  • Cars can adjust faster; manufacturers even limit production intentionally.
  • Real estate is fragmented with thousands of builders and longer cycles.
• Homeowners are reluctant to sell without a clear better option due to limited inventory.
  • Many prefer renovating their current home rather than moving.
• Final takeaway:
  • Picture a game of musical chairs with 5 million people waiting for a seat.
  • Homeowners hesitate to “stand up” (sell) because they fear not finding a new home.
  • The housing shortage and high demand create a unique market dynamic unlikely to see a crash soon.