The housing market is still a mess for prospective homebuyers. So what needs to happen in order for them to see some relief? Celebrity real estate agent Ryan Serhant joined TheStreet to share what has to take place in order for the market to really cool down.
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Full Video Transcript Below:
CONWAY GITTENS: So tell me, easy ratio, home affordability down, home prices up. If you got called in into a meeting on how to fix this problem, what would your strategies be?
RYAN SERHANT: Affordability and pricing is affected in three ways. It's supply, demand and interest rates. So number one is rates are just too high. So rates have to come down that fix a lot of the problems because it will also fix inventory, a significant amount of the homes that should be on the market today. I think we're short like two million nationally are just not coming to market because people can't afford where they want to go because rates are too high on the next purchase. So that's why, you know, we have a huge presence in Florida. You know, we list a home for $6.2 million yesterday. It's fully in contract by yesterday, you know, and that's it. You know, it shouldn't be that fast.
That's OK. Right? it's fine. And so I think as you have rates start to come down and as you have incentives get created in a lot of especially urban markets to create new housing, then affordability will become much, much better. There will be more options for more people and you'll have more sellers go through that life cycle of moving. You have a whole Baby Boomer generation that's saying, no, I think we're just going to stay because your loan is a financial asset. It's not debt anymore.
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CONWAY GITTENS: But what about the supply side of that equation? Because I mean, we're here in New York and there are other places that have this problem, you know, not in my backyard. They come up with these plans to build more housing because we don't have enough supply. So how do we address that issue?
RYAN SERHANT: Supply is getting better now. You know, even in some of the hottest markets in New York City, the entire state of Florida, you actually have supply ticking up for the first time in four years. So more and more people are coming to market as rates start to stabilize. So rates coming down, not going down to where we were pre-covid, but coming to a point where people say, OK, this is the new normal, I'm either going to move or I'm not going to move.
That creates more supply, more home builders going into the market as land prices hopefully start to stabilize and come down, brings more homes to the market and increases supply. Labor costs, right construction costs, you know, material costs, cost of lumber, the cost of appliances. As costs stabilize, as inflation starts to cool a little bit. All of that is going to help create more supply. It's just not going to do it tomorrow. But we'll look back in a year from now, probably at this moment. We'll also be post-election and we'll say, OK, that's when it started.
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