The Expert Podcast

• Real Estate and Supply/Demand: Real estate doesn't follow the usual laws of supply and demand. Unlike items like cars or groceries, real estate is a necessity—everyone needs a roof over their head, and people will pay whatever it takes to secure that.
• Price and Market Forces: The price of homes is largely immaterial; the market won't lower prices to meet the demand. Homelessness is proof that the market doesn't adjust to meet the price. People will pay what they can, but there aren't enough affordable homes available.
• House Burden: The term "house burdened" refers to spending more than 30% of your income on housing. In some regions, people are spending 50% or more, yet they still find a way to pay because the demand for housing is so high.
• Supply and Demand in Housing: Supply and demand don't work the same in housing because people must have a place to live. Even if there are economic challenges or a recession, the cost of housing won't go down significantly because there are still millions more people in need of homes than there are homes available.
• The Impact of Safety Nets: Pandemic relief, eviction moratoriums, and rent controls have temporarily eased some of the housing crisis. However, as these safety nets are removed, there's an increasing gap between what people can pay and the current market prices.
• Housing Shortage and Increased Demand: There is a huge shortage of homes, and it's unlikely to be solved quickly. Even if the current occupants of homes can't afford their rent or mortgage, there's always someone else willing to step in and pay. The demand for housing is still strong.
• Historical Context: Looking at previous market crashes, such as the 2008 housing crisis, it's clear that while prices may dip slightly, they eventually rise again. The shortage of homes now is much more severe, with fewer homes being built in the past 15 years.
• Challenges in Homebuilding: There are significant challenges to building new homes, including inflation, supply chain issues, and labor shortages in the construction industry. Even if homebuilders wanted to increase the volume of homes, it's not feasible due to these constraints.
• The Bottom Line: Regardless of economic fluctuations, housing demand remains high, and real estate prices are unlikely to decrease significantly. Even if people lose their homes, others are ready to pay the higher prices to step in.
• Listener Engagement: Share your thoughts on this issue. Are you seeing the same trends in your daily life? Would someone step in to pay a higher rent if an existing tenant couldn't? Let us know in the comments!