February 9, 2025 • 14 mins
Is the American dream of owning a home slipping away? With a housing market squeezed by a shortage of 3.8 million homes over the past decade, we unravel the complicated web of factors behind this crisis. From the lingering impacts of the 2008 housing crash to prohibitive material costs and zoning laws, we dissect why millions find themselves locked out of the housing market. We tackle the controversial role of institutional investors wielding cash offers, sidelining regular buyers, and creating a battleground for affordable housing.
Turning challenges into opportunities, we explore a range of solutions to combat this housing shortage. Our discussion spans easing zoning restrictions to encourage diverse housing options, boosting smart urban planning, and streamlining permit processes. We also consider incentivizing developers through tax breaks and innovative financing models to pave the way for affordable housing projects. Addressing the labor shortage, we advocate for vocational training and skilled immigration to bolster workforce strength. Finally, we weigh the potential need for regulations on institutional investors to level the playing field for prospective homeowners. Join us as we navigate these thorny issues and propose actionable strategies for a fairer housing future.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Okay, so you know how frustrating the housing market
is right now.
Speaker 2 (00:03):
Oh.
Speaker 1 (00:03):
It's like you can't catch a break.
Right, we're going to dive deeptoday into the US housing
shortage.
Speaker 2 (00:10):
Okay.
Speaker 1 (00:11):
To figure out.
You know why it's so hard tofind a decent place to live.
Sounds good, we've got somegreat research.
Speaker 2 (00:17):
Oh, okay.
Speaker 1 (00:18):
Like expert analysis market data, even some
historical context.
Speaker 2 (00:22):
Yeah.
Speaker 1 (00:22):
So we can connect all the dots Right and we'll
uncover some interesting factslike how much the US has
actually underbuilt in recentyears Right and the role of, you
know, those big time investors.
Speaker 2 (00:35):
Those institutional investors.
Speaker 1 (00:36):
Exactly, it's a big issue, it really is.
Speaker 2 (00:39):
What I think is so interesting about all this is
that it's not just prices goingup.
Yeah, you know, we're actuallydealing with like a genuine
scarcity of homes.
Speaker 1 (00:47):
It's like trying to find a parking spot at a concert
that's sold out.
I like that, you know therejust aren't enough places for
everybody.
Nope, and the US is facing thispersistent housing shortage,
yes, which means there's justaren't enough homes to meet the
demand.
Speaker 2 (01:03):
Exactly Supply and demand issue.
Speaker 1 (01:05):
Exactly.
Speaker 2 (01:06):
At its core.
Speaker 1 (01:06):
And get this.
We've underbuilt by anestimated 3.8 million homes in
the past decade.
Speaker 2 (01:12):
Wow.
Speaker 1 (01:14):
That's a lot of homes .
Speaker 2 (01:15):
It's huge.
That's like trying to put theentire population of Los Angeles
into like nowhere Right yeah.
Speaker 1 (01:22):
Crazy.
Speaker 2 (01:23):
And on top of that you have, like, the crazy cost
of materials and labor.
Speaker 1 (01:28):
Yeah.
Speaker 2 (01:29):
You've got those really strict zoning laws, and
then, of course, you know thehigh mortgage rates we keep
hearing about.
Speaker 1 (01:34):
It never ends.
Speaker 2 (01:35):
It feels like it's this like perfect storm in the
housing market.
Speaker 1 (01:39):
A perfect storm.
Speaker 2 (01:40):
Yeah.
Speaker 1 (01:40):
So let's unpack this underbuilding enigma.
Speaker 2 (01:43):
Sure.
Speaker 1 (01:43):
I like how you put that.
What happened after that 2008housing crash?
Speaker 2 (01:47):
Well, a lot of home builders.
They got burned really badly.
A lot of them went bankrupt andthe entire industry just got
really risk averse.
Speaker 1 (01:56):
It makes sense.
Nobody wants to go through thatagain.
Speaker 2 (01:58):
No, you don't want to be on that financial roller
coaster, and so they're hesitantto like ramp up construction
again.
Makes sense Because they'reafraid of another crash.
Speaker 1 (02:07):
I see so, but wouldn't building more homes
help?
Speaker 2 (02:10):
In theory, yes, but then you have things like those
interest rate hikes.
Speaker 1 (02:14):
Right.
Speaker 2 (02:15):
Which makes borrowing more expensive for everybody.
Speaker 1 (02:17):
For the builders and the buyers.
Speaker 2 (02:18):
Exactly.
It's like trying to solve thispuzzle, but the pieces keep
changing.
Speaker 1 (02:23):
Right.
Speaker 2 (02:23):
It's tough.
Speaker 1 (02:24):
It's like a moving target.
Yeah, speaking of navigatingthis tricky real estate market.
Yeah, we've talked before aboutFlowers and Associates.
Speaker 2 (02:33):
Oh yeah, they're great.
Speaker 1 (02:34):
They specialize in special needs housing and
property investment.
Speaker 2 (02:38):
Good people.
Speaker 1 (02:38):
If you're looking to make your money work for you in
real estate, give them a call at901-445-8148.
Speaker 2 (02:46):
Good advice.
Speaker 1 (02:48):
But back to those rising costs.
Speaker 2 (02:49):
Yeah.
Speaker 1 (02:50):
Like I remember when lumber prices went crazy during
the pandemic.
Oh man it was like if youwanted to build a tree house,
you were spending a fortune.
Speaker 2 (02:58):
I know the pandemic really messed things up with the
global supply chains and youknow construction materials
really took a hit.
Speaker 1 (03:05):
He did.
Speaker 2 (03:06):
I mean we saw lumber prices increase by like over 100
percent in some cases.
Speaker 1 (03:11):
Seriously.
Speaker 2 (03:12):
Yeah, and it wasn't just lumber.
Yeah, it was steel, concrete,like everything got so expensive
.
Speaker 1 (03:17):
Like someone hit the increase price button.
Speaker 2 (03:20):
Yeah, on everything I know it was wild.
Speaker 1 (03:22):
Yeah, and then, on top of that, we had the labor
shortage.
Speaker 2 (03:24):
Yes.
Speaker 1 (03:25):
Which I'm sure didn't help.
Speaker 2 (03:26):
No, not at all.
The construction industry hasbeen dealing with a labor
shortage for years, and thepandemic just made it worse.
Of course you know, with fewerworkers, wages go up, which
drives up construction costs.
Speaker 1 (03:40):
It's amazing how interconnected all of this is.
Speaker 2 (03:42):
I know it's like a domino effect.
Speaker 1 (03:44):
Yeah, it makes you wonder if there's any way to
break the cycle.
Right, but before we get tothat, let's talk about zoning
laws, yeah, which I think don'tget enough attention.
Speaker 2 (03:53):
Yeah.
Speaker 1 (03:53):
They play a big role in the housing shortage, don't
they?
Speaker 2 (03:56):
Oh, absolutely.
Zoning laws, you know.
They dictate how land can beused.
Right can be used and theyoften have unintended
consequences when it comes tothe housing supply.
So in a lot of cities, zoningfavors single family homes and
it limits denser housing options.
Speaker 1 (04:14):
So like apartments.
Speaker 2 (04:15):
Yeah, apartments, townhouses, things like that
Interesting.
So it's not just whetherdevelopers want to build more,
it's that sometimes they'rerestricted.
Speaker 1 (04:25):
By these regulations.
Speaker 2 (04:26):
Exactly.
Speaker 1 (04:27):
It's like trying to solve a traffic jam by making
the roads narrower.
Speaker 2 (04:30):
I like that.
That's a great analogy.
Yeah, it really is, and youknow, it impacts affordability
too.
Speaker 1 (04:35):
Yeah.
Speaker 2 (04:36):
Restrictive zoning laws lead to higher housing
costs, right, and they limit theoptions for people who are
looking for more affordableplaces to live.
Speaker 1 (04:44):
Especially in areas with high demand.
Speaker 2 (04:46):
Exactly.
Speaker 1 (04:47):
Yeah.
Speaker 2 (04:47):
It's a tough situation all around.
Speaker 1 (04:49):
It really is.
Speaker 2 (04:50):
Yeah yeah, it's a classic supply and demand issue,
but the regulations just addthis whole other layer of
complexity.
Speaker 1 (04:56):
Yeah.
Speaker 2 (04:57):
And then, on top of all that, you have those
institutional investors.
Have you ever wondered who'sbuying up all those houses?
Speaker 1 (05:04):
I have.
Speaker 2 (05:05):
Often paying cash.
Speaker 1 (05:06):
Yeah.
Speaker 2 (05:06):
Driving prices even higher.
Speaker 1 (05:08):
It feels like regular people can't compete.
Speaker 2 (05:11):
Right, it's tough out there.
Speaker 1 (05:12):
So are we talking about those big investment firms
?
Speaker 2 (05:14):
Exactly.
Speaker 1 (05:15):
Hedge funds and all that.
Speaker 2 (05:16):
Yeah, hedge funds, private equity firms, even
pension funds.
Wow, all these big players aregetting into residential real
estate.
Speaker 1 (05:24):
Why are they so interested in houses?
Speaker 2 (05:26):
Well.
Speaker 1 (05:26):
Is it just about making a quick buck?
Speaker 2 (05:29):
Profit is definitely a factor, yeah, but it's not
just that.
So first you have rental income, and as homeownership becomes
less attainable for a lot ofpeople, the demand for rentals
goes up.
Speaker 1 (05:45):
Makes sense, which makes it a reliable income
stream for these investors, sothey're capitalizing on the very
problem we're talking about.
Speaker 2 (05:49):
In a way yeah.
Speaker 1 (05:50):
Wow.
Speaker 2 (05:51):
And second, real estate is often seen as a hedge
against inflation.
Speaker 1 (05:55):
Okay, how so?
Speaker 2 (05:56):
As the cost of goods and services rises, property
values and rents tend to risetoo.
Speaker 1 (06:02):
Okay.
Speaker 2 (06:03):
And that helps protect their investments from
losing value.
Speaker 1 (06:07):
So it's like a safety net for them, exactly when
times are uncertain.
Speaker 2 (06:10):
Yeah, and lastly, real estate is generally
considered a more stableinvestment Compared to Compared
to, like the stock market.
Speaker 1 (06:18):
Okay, that makes sense.
Speaker 2 (06:19):
Especially during times of economic volatility.
Speaker 1 (06:22):
So it makes sense for them.
Speaker 2 (06:23):
Right.
Speaker 1 (06:24):
What about the rest of us?
Doesn't seem fair.
Speaker 2 (06:28):
It's a valid concern.
Speaker 1 (06:29):
Yeah.
Speaker 2 (06:30):
These large scale purchases by institutional
investors.
Speaker 1 (06:34):
Yeah.
Speaker 2 (06:35):
They can definitely drive up prices Right.
It makes it harder for firsttime buyers.
Speaker 1 (06:41):
Yeah.
Speaker 2 (06:41):
And people with limited resources to compete.
Speaker 1 (06:44):
It's like trying to play Monopoly.
When one person starts with allthe properties, that's a good
way to put it.
Yeah.
Speaker 2 (06:49):
And there's another issue too what's that?
When these companies turnsingle family homes into rentals
, it shrinks the pool of homesfor people who want to buy.
Speaker 1 (06:59):
Oh wow.
So not only are they driving upprices, they're limiting our
options too.
Speaker 2 (07:04):
It's a double whammy.
Speaker 1 (07:05):
It feels like we're in a maze with no way out.
Speaker 2 (07:08):
Well, I wouldn't say there's no way out.
There are potential solutions,but they require a multifaceted
approach.
And I think the first step isincreasing the housing supply.
Speaker 1 (07:20):
Okay, more houses for everyone.
Speaker 2 (07:22):
Exactly.
Speaker 1 (07:22):
But how do we do that ?
Speaker 2 (07:24):
Well, one way is to ease those zoning restrictions,
you know, to allow for moremultifamily housing.
Speaker 1 (07:31):
So like townhouses.
Speaker 2 (07:33):
Townhouses, apartment complexes, even co-living
spaces.
Speaker 1 (07:37):
I've heard of those.
Speaker 2 (07:38):
Those are becoming more popular.
Speaker 1 (07:39):
Yeah.
Speaker 2 (07:40):
So we need to move away from those sprawling
suburbs.
Speaker 1 (07:44):
Okay.
Speaker 2 (07:45):
With just single family homes.
Speaker 1 (07:46):
Okay.
Speaker 2 (07:47):
And embrace more diverse more diverse and denser
housing options.
Speaker 1 (07:51):
I'm all for that.
Speaker 2 (07:52):
But wouldn't that make some neighborhoods feel
overcrowded?
Speaker 1 (07:55):
Yeah, that's a good point.
Speaker 2 (07:56):
It's a valid concern, but it's all about smart urban
planning, you know, and creatinga mix of housing types that fit
the neighborhood.
That makes sense.
Speaker 1 (08:05):
Yeah, and we also need to streamline the permit
approval process.
Speaker 2 (08:10):
Oh yeah, I bet that takes forever.
Speaker 1 (08:11):
It can take forever, yeah, so if we can speed up
construction, Right, becausetime is money.
Exactly.
Speaker 2 (08:18):
Especially with construction.
Speaker 1 (08:19):
Yes.
Speaker 2 (08:20):
So are there other ways to incentivize developers
to build more homes?
Speaker 1 (08:25):
Yeah.
Speaker 2 (08:26):
Especially affordable ones, absolutely Okay.
Speaker 1 (08:28):
So some cities offer tax breaks Okay or density
bonuses to encourage developersto build affordable units Okay.
Others are exploring innovativefinancing models Okay To make
it easier for developers to getthe money they need Right For
these types of projects.
Speaker 2 (08:43):
That's good.
Speaker 1 (08:43):
Yeah, so there's a lot of creativity happening.
Speaker 2 (08:46):
That's encouraging.
Yeah so there's a lot ofcreativity happening.
That's encouraging, yeah.
Speaker 1 (08:49):
But what about the labor shortage?
Speaker 2 (08:50):
Oh, for real.
If we don't have enough skilledworkers, how are we going to
build all these houses?
Speaker 1 (08:54):
That's a great point.
Yeah, we definitely need toaddress that labor shortage.
Speaker 2 (08:58):
So we could invest in vocational training programs to
give people the skills theyneed to succeed in these jobs
Exactly, and they're good payingjobs.
Speaker 1 (09:08):
That's awesome.
Speaker 2 (09:09):
Yeah, we could also explore options for skilled
immigration.
Speaker 1 (09:13):
To bring in workers from other countries.
Speaker 2 (09:15):
Yeah, exactly.
Speaker 1 (09:16):
Okay, so it's about making the industry more
appealing to a wider range ofpeople.
Speaker 2 (09:21):
Exactly and creating a pipeline of skilled workers.
Speaker 1 (09:25):
So what about those institutional investors?
Speaker 2 (09:27):
Yeah.
Speaker 1 (09:28):
Is there any way to kind of regulate their impact?
Speaker 2 (09:30):
It's tricky but, some cities and states are
considering taxes orrestrictions on corporate home
ownership to prevent them frombuying up too much.
Speaker 1 (09:41):
That seems reasonable .
Speaker 2 (09:42):
Yeah, the goal is not to ban them entirely, but to
make sure there's a levelplaying field.
Speaker 1 (09:45):
Right.
Speaker 2 (09:46):
For everyone Exactly To have a chance.
Yeah, the goal is not to banthem entirely, right, but to
make sure there's a levelplaying field Right For everyone
.
Exactly.
Speaker 1 (09:51):
To have a chance.
Speaker 2 (09:51):
Yeah, and another idea is to incentivize selling
to owner occupants rather thaninvestors.
Speaker 1 (09:59):
OK, so like giving tax breaks.
Speaker 2 (10:00):
Yeah, exactly Like tax breaks for people who are
buying a home to live in.
Speaker 1 (10:04):
Makes sense.
Yeah, it feels like there'sfinally some light at the end of
this tunnel.
Speaker 2 (10:08):
Yeah, it's a step in the right direction.
Good, but finding the rightbalance is crucial.
You know we need a healthy andequitable housing market.
It's not just about buildingmore homes, yeah, it's about
building the right kinds ofhomes in the right places.
Speaker 1 (10:26):
Okay.
Speaker 2 (10:26):
And making sure everybody has a fair chance.
I like that To access them.
Speaker 1 (10:31):
That's really good.
So, this is a complex issue.
Speaker 2 (10:34):
It is.
Speaker 1 (10:35):
But it's really exciting to see so many
solutions.
I agree being explored.
Speaker 2 (10:40):
It feels like we have an opportunity to create a more
inclusive and sustainablehousing market for the future.
Speaker 1 (10:49):
Absolutely, and the more we understand this stuff,
the better equipped we are tomake a change.
Speaker 2 (10:55):
Exactly.
Speaker 1 (10:55):
And advocate for things.
Speaker 2 (10:57):
Advocate for change.
Yeah, in our own communities,exactly.
Speaker 1 (11:00):
Yeah, it really shows how this affects everything.
Speaker 2 (11:03):
It does.
It's not just about finding aplace to live Right.
It impacts the whole economy,our communities.
Speaker 1 (11:08):
Yeah.
Speaker 2 (11:09):
Even things like social mobility.
Speaker 1 (11:11):
So it's about having a good quality of life, yeah,
and like the freedom to go afteryour dreams.
Speaker 2 (11:15):
Exactly when housing costs are high.
It just puts a strain oneverybody's budget.
Speaker 1 (11:20):
Makes sense.
Speaker 2 (11:21):
And that means less money for other things you need
like health care or education,or just enjoying life.
Exactly, and it can stop peoplefrom moving to places with
better jobs.
Speaker 1 (11:33):
Or better schools.
Speaker 2 (11:34):
Exactly.
Speaker 1 (11:35):
It's like you're stuck, even if you want
something better.
Speaker 2 (11:38):
And when there's not enough affordable housing, it
really hurts lower incomefamilies and individuals.
Speaker 1 (11:45):
Makes it harder to get ahead.
Yeah, it does, it's likehousing should be a basic need.
Speaker 2 (11:50):
It should be.
Speaker 1 (11:51):
Not just something you buy and sell.
Speaker 2 (11:52):
I agree.
Speaker 1 (11:53):
So what role do you think technology will play in
the future of housing?
Speaker 2 (11:57):
Well, we're already seeing technology change the
real estate industry.
Like those online platformsconnecting buyers and sellers.
Virtual tours.
Speaker 1 (12:07):
I love those.
Speaker 2 (12:07):
Yeah, you can view properties from anywhere.
Speaker 1 (12:10):
Yeah.
Speaker 2 (12:10):
And even AI powered tools Right, helping us figure
out property values.
Speaker 1 (12:15):
I even heard about 3D printed houses.
Speaker 2 (12:17):
That's right.
Speaker 1 (12:19):
Is that for real?
It is.
Speaker 2 (12:20):
That's crazy, and who knows what's next.
Speaker 1 (12:22):
Yeah.
Speaker 2 (12:23):
Things like modular construction could totally
change how we build.
What's that?
That's where you build thehomes off site in a factory.
Oh and then you put themtogether on location.
Speaker 1 (12:34):
That's interesting.
Speaker 2 (12:34):
Yeah, it could be, a game changer.
Speaker 1 (12:36):
So it sounds like we're on the edge of a housing
revolution.
Speaker 2 (12:38):
It does feel that way .
Speaker 1 (12:40):
But how do we make sure this technology helps
everyone helps everyone.
That's the big question.
Speaker 2 (12:49):
Yeah, technology can be used for good or bad.
We have to be careful andsupport policies that make sure
everyone benefits.
Speaker 1 (12:53):
So it's not just about having the technology,
it's about using it the rightway.
Speaker 2 (12:57):
Exactly For the right reasons.
It's about empowering people.
Speaker 1 (13:01):
Yeah.
Speaker 2 (13:01):
Not leaving them behind.
Speaker 1 (13:03):
We've talked about a lot today.
Speaker 2 (13:05):
We have.
Speaker 1 (13:05):
From the history of the housing shortage to all the
factors causing it.
Speaker 2 (13:10):
Yes.
Speaker 1 (13:11):
And some really cool solutions.
Speaker 2 (13:12):
There are some promising ideas out there.
Speaker 1 (13:14):
It's not a simple issue.
Speaker 2 (13:16):
No, it's not.
Speaker 1 (13:16):
But I think we understand it a lot better now.
Speaker 2 (13:19):
I agree.
Speaker 1 (13:20):
And I hope our listeners feel like they can do
something to make a difference,it's important to be informed.
Yeah, the more we know, thebetter we can navigate this
market and advocate for a systemthat works for everybody.
Speaker 2 (13:33):
That's the goal.
Speaker 1 (13:34):
And don't forget, there are resources out there to
help Right If you're lookingfor specialized housing,
especially for special needs, orif you're interested in
property investment.
Our friends at FlowersAssociates are the experts.
Speaker 2 (13:48):
They are.
Speaker 1 (13:48):
You can give them a call at 901-445-8148.
Great people, and for those ofyou who want to stay out of the
curve and learn about howtechnology is shaping real
estate, robert Flowers has a newbook out.
Speaker 2 (14:03):
I heard good things about that.
Speaker 1 (14:05):
It's called AI Strategies for Real Estate
Entrepreneurs.
Speaker 2 (14:08):
Catchy title.
Speaker 1 (14:09):
And it's available on Amazon.
Check it out.
It's a great resource.
Speaker 2 (14:12):
It is.
Speaker 1 (14:12):
Well, this has been a fascinating deep dive it has
Into the world of housing.
Definitely I hope you learnedsomething new today.
Speaker 2 (14:18):
Me too.
Speaker 1 (14:19):
And feel ready to join the conversation.
Speaker 2 (14:21):
It's an important one .
Okay, so you know how frustrating the housing market
is right now.
Speaker 2 (00:03):
Oh.
Speaker 1 (00:03):
It's like you can't catch a break.
Right, we're going to dive deeptoday into the US housing
shortage.
Speaker 2 (00:10):
Okay.
Speaker 1 (00:11):
To figure out.
You know why it's so hard tofind a decent place to live.
Sounds good, we've got somegreat research.
Speaker 2 (00:17):
Oh, okay.
Speaker 1 (00:18):
Like expert analysis market data, even some
historical context.
Speaker 2 (00:22):
Yeah.
Speaker 1 (00:22):
So we can connect all the dots Right and we'll
uncover some interesting factslike how much the US has
actually underbuilt in recentyears Right and the role of, you
know, those big time investors.
Speaker 2 (00:35):
Those institutional investors.
Speaker 1 (00:36):
Exactly, it's a big issue, it really is.
Speaker 2 (00:39):
What I think is so interesting about all this is
that it's not just prices goingup.
Yeah, you know, we're actuallydealing with like a genuine
scarcity of homes.
Speaker 1 (00:47):
It's like trying to find a parking spot at a concert
that's sold out.
I like that, you know therejust aren't enough places for
everybody.
Nope, and the US is facing thispersistent housing shortage,
yes, which means there's justaren't enough homes to meet the
demand.
Speaker 2 (01:03):
Exactly Supply and demand issue.
Speaker 1 (01:05):
Exactly.
Speaker 2 (01:06):
At its core.
Speaker 1 (01:06):
And get this.
We've underbuilt by anestimated 3.8 million homes in
the past decade.
Speaker 2 (01:12):
Wow.
Speaker 1 (01:14):
That's a lot of homes .
Speaker 2 (01:15):
It's huge.
That's like trying to put theentire population of Los Angeles
into like nowhere Right yeah.
Speaker 1 (01:22):
Crazy.
Speaker 2 (01:23):
And on top of that you have, like, the crazy cost
of materials and labor.
Speaker 1 (01:28):
Yeah.
Speaker 2 (01:29):
You've got those really strict zoning laws, and
then, of course, you know thehigh mortgage rates we keep
hearing about.
Speaker 1 (01:34):
It never ends.
Speaker 2 (01:35):
It feels like it's this like perfect storm in the
housing market.
Speaker 1 (01:39):
A perfect storm.
Speaker 2 (01:40):
Yeah.
Speaker 1 (01:40):
So let's unpack this underbuilding enigma.
Speaker 2 (01:43):
Sure.
Speaker 1 (01:43):
I like how you put that.
What happened after that 2008housing crash?
Speaker 2 (01:47):
Well, a lot of home builders.
They got burned really badly.
A lot of them went bankrupt andthe entire industry just got
really risk averse.
Speaker 1 (01:56):
It makes sense.
Nobody wants to go through thatagain.
Speaker 2 (01:58):
No, you don't want to be on that financial roller
coaster, and so they're hesitantto like ramp up construction
again.
Makes sense Because they'reafraid of another crash.
Speaker 1 (02:07):
I see so, but wouldn't building more homes
help?
Speaker 2 (02:10):
In theory, yes, but then you have things like those
interest rate hikes.
Speaker 1 (02:14):
Right.
Speaker 2 (02:15):
Which makes borrowing more expensive for everybody.
Speaker 1 (02:17):
For the builders and the buyers.
Speaker 2 (02:18):
Exactly.
It's like trying to solve thispuzzle, but the pieces keep
changing.
Speaker 1 (02:23):
Right.
Speaker 2 (02:23):
It's tough.
Speaker 1 (02:24):
It's like a moving target.
Yeah, speaking of navigatingthis tricky real estate market.
Yeah, we've talked before aboutFlowers and Associates.
Speaker 2 (02:33):
Oh yeah, they're great.
Speaker 1 (02:34):
They specialize in special needs housing and
property investment.
Speaker 2 (02:38):
Good people.
Speaker 1 (02:38):
If you're looking to make your money work for you in
real estate, give them a call at901-445-8148.
Speaker 2 (02:46):
Good advice.
Speaker 1 (02:48):
But back to those rising costs.
Speaker 2 (02:49):
Yeah.
Speaker 1 (02:50):
Like I remember when lumber prices went crazy during
the pandemic.
Oh man it was like if youwanted to build a tree house,
you were spending a fortune.
Speaker 2 (02:58):
I know the pandemic really messed things up with the
global supply chains and youknow construction materials
really took a hit.
Speaker 1 (03:05):
He did.
Speaker 2 (03:06):
I mean we saw lumber prices increase by like over 100
percent in some cases.
Speaker 1 (03:11):
Seriously.
Speaker 2 (03:12):
Yeah, and it wasn't just lumber.
Yeah, it was steel, concrete,like everything got so expensive
.
Speaker 1 (03:17):
Like someone hit the increase price button.
Speaker 2 (03:20):
Yeah, on everything I know it was wild.
Speaker 1 (03:22):
Yeah, and then, on top of that, we had the labor
shortage.
Speaker 2 (03:24):
Yes.
Speaker 1 (03:25):
Which I'm sure didn't help.
Speaker 2 (03:26):
No, not at all.
The construction industry hasbeen dealing with a labor
shortage for years, and thepandemic just made it worse.
Of course you know, with fewerworkers, wages go up, which
drives up construction costs.
Speaker 1 (03:40):
It's amazing how interconnected all of this is.
Speaker 2 (03:42):
I know it's like a domino effect.
Speaker 1 (03:44):
Yeah, it makes you wonder if there's any way to
break the cycle.
Right, but before we get tothat, let's talk about zoning
laws, yeah, which I think don'tget enough attention.
Speaker 2 (03:53):
Yeah.
Speaker 1 (03:53):
They play a big role in the housing shortage, don't
they?
Speaker 2 (03:56):
Oh, absolutely.
Zoning laws, you know.
They dictate how land can beused.
Right can be used and theyoften have unintended
consequences when it comes tothe housing supply.
So in a lot of cities, zoningfavors single family homes and
it limits denser housing options.
Speaker 1 (04:14):
So like apartments.
Speaker 2 (04:15):
Yeah, apartments, townhouses, things like that
Interesting.
So it's not just whetherdevelopers want to build more,
it's that sometimes they'rerestricted.
Speaker 1 (04:25):
By these regulations.
Speaker 2 (04:26):
Exactly.
Speaker 1 (04:27):
It's like trying to solve a traffic jam by making
the roads narrower.
Speaker 2 (04:30):
I like that.
That's a great analogy.
Yeah, it really is, and youknow, it impacts affordability
too.
Speaker 1 (04:35):
Yeah.
Speaker 2 (04:36):
Restrictive zoning laws lead to higher housing
costs, right, and they limit theoptions for people who are
looking for more affordableplaces to live.
Speaker 1 (04:44):
Especially in areas with high demand.
Speaker 2 (04:46):
Exactly.
Speaker 1 (04:47):
Yeah.
Speaker 2 (04:47):
It's a tough situation all around.
Speaker 1 (04:49):
It really is.
Speaker 2 (04:50):
Yeah yeah, it's a classic supply and demand issue,
but the regulations just addthis whole other layer of
complexity.
Speaker 1 (04:56):
Yeah.
Speaker 2 (04:57):
And then, on top of all that, you have those
institutional investors.
Have you ever wondered who'sbuying up all those houses?
Speaker 1 (05:04):
I have.
Speaker 2 (05:05):
Often paying cash.
Speaker 1 (05:06):
Yeah.
Speaker 2 (05:06):
Driving prices even higher.
Speaker 1 (05:08):
It feels like regular people can't compete.
Speaker 2 (05:11):
Right, it's tough out there.
Speaker 1 (05:12):
So are we talking about those big investment firms
?
Speaker 2 (05:14):
Exactly.
Speaker 1 (05:15):
Hedge funds and all that.
Speaker 2 (05:16):
Yeah, hedge funds, private equity firms, even
pension funds.
Wow, all these big players aregetting into residential real
estate.
Speaker 1 (05:24):
Why are they so interested in houses?
Speaker 2 (05:26):
Well.
Speaker 1 (05:26):
Is it just about making a quick buck?
Speaker 2 (05:29):
Profit is definitely a factor, yeah, but it's not
just that.
So first you have rental income, and as homeownership becomes
less attainable for a lot ofpeople, the demand for rentals
goes up.
Speaker 1 (05:45):
Makes sense, which makes it a reliable income
stream for these investors, sothey're capitalizing on the very
problem we're talking about.
Speaker 2 (05:49):
In a way yeah.
Speaker 1 (05:50):
Wow.
Speaker 2 (05:51):
And second, real estate is often seen as a hedge
against inflation.
Speaker 1 (05:55):
Okay, how so?
Speaker 2 (05:56):
As the cost of goods and services rises, property
values and rents tend to risetoo.
Speaker 1 (06:02):
Okay.
Speaker 2 (06:03):
And that helps protect their investments from
losing value.
Speaker 1 (06:07):
So it's like a safety net for them, exactly when
times are uncertain.
Speaker 2 (06:10):
Yeah, and lastly, real estate is generally
considered a more stableinvestment Compared to Compared
to, like the stock market.
Speaker 1 (06:18):
Okay, that makes sense.
Speaker 2 (06:19):
Especially during times of economic volatility.
Speaker 1 (06:22):
So it makes sense for them.
Speaker 2 (06:23):
Right.
Speaker 1 (06:24):
What about the rest of us?
Doesn't seem fair.
Speaker 2 (06:28):
It's a valid concern.
Speaker 1 (06:29):
Yeah.
Speaker 2 (06:30):
These large scale purchases by institutional
investors.
Speaker 1 (06:34):
Yeah.
Speaker 2 (06:35):
They can definitely drive up prices Right.
It makes it harder for firsttime buyers.
Speaker 1 (06:41):
Yeah.
Speaker 2 (06:41):
And people with limited resources to compete.
Speaker 1 (06:44):
It's like trying to play Monopoly.
When one person starts with allthe properties, that's a good
way to put it.
Yeah.
Speaker 2 (06:49):
And there's another issue too what's that?
When these companies turnsingle family homes into rentals
, it shrinks the pool of homesfor people who want to buy.
Speaker 1 (06:59):
Oh wow.
So not only are they driving upprices, they're limiting our
options too.
Speaker 2 (07:04):
It's a double whammy.
Speaker 1 (07:05):
It feels like we're in a maze with no way out.
Speaker 2 (07:08):
Well, I wouldn't say there's no way out.
There are potential solutions,but they require a multifaceted
approach.
And I think the first step isincreasing the housing supply.
Speaker 1 (07:20):
Okay, more houses for everyone.
Speaker 2 (07:22):
Exactly.
Speaker 1 (07:22):
But how do we do that ?
Speaker 2 (07:24):
Well, one way is to ease those zoning restrictions,
you know, to allow for moremultifamily housing.
Speaker 1 (07:31):
So like townhouses.
Speaker 2 (07:33):
Townhouses, apartment complexes, even co-living
spaces.
Speaker 1 (07:37):
I've heard of those.
Speaker 2 (07:38):
Those are becoming more popular.
Speaker 1 (07:39):
Yeah.
Speaker 2 (07:40):
So we need to move away from those sprawling
suburbs.
Speaker 1 (07:44):
Okay.
Speaker 2 (07:45):
With just single family homes.
Speaker 1 (07:46):
Okay.
Speaker 2 (07:47):
And embrace more diverse more diverse and denser
housing options.
Speaker 1 (07:51):
I'm all for that.
Speaker 2 (07:52):
But wouldn't that make some neighborhoods feel
overcrowded?
Speaker 1 (07:55):
Yeah, that's a good point.
Speaker 2 (07:56):
It's a valid concern, but it's all about smart urban
planning, you know, and creatinga mix of housing types that fit
the neighborhood.
That makes sense.
Speaker 1 (08:05):
Yeah, and we also need to streamline the permit
approval process.
Speaker 2 (08:10):
Oh yeah, I bet that takes forever.
Speaker 1 (08:11):
It can take forever, yeah, so if we can speed up
construction, Right, becausetime is money.
Exactly.
Speaker 2 (08:18):
Especially with construction.
Speaker 1 (08:19):
Yes.
Speaker 2 (08:20):
So are there other ways to incentivize developers
to build more homes?
Speaker 1 (08:25):
Yeah.
Speaker 2 (08:26):
Especially affordable ones, absolutely Okay.
Speaker 1 (08:28):
So some cities offer tax breaks Okay or density
bonuses to encourage developersto build affordable units Okay.
Others are exploring innovativefinancing models Okay To make
it easier for developers to getthe money they need Right For
these types of projects.
Speaker 2 (08:43):
That's good.
Speaker 1 (08:43):
Yeah, so there's a lot of creativity happening.
Speaker 2 (08:46):
That's encouraging.
Yeah so there's a lot ofcreativity happening.
That's encouraging, yeah.
Speaker 1 (08:49):
But what about the labor shortage?
Speaker 2 (08:50):
Oh, for real.
If we don't have enough skilledworkers, how are we going to
build all these houses?
Speaker 1 (08:54):
That's a great point.
Yeah, we definitely need toaddress that labor shortage.
Speaker 2 (08:58):
So we could invest in vocational training programs to
give people the skills theyneed to succeed in these jobs
Exactly, and they're good payingjobs.
Speaker 1 (09:08):
That's awesome.
Speaker 2 (09:09):
Yeah, we could also explore options for skilled
immigration.
Speaker 1 (09:13):
To bring in workers from other countries.
Speaker 2 (09:15):
Yeah, exactly.
Speaker 1 (09:16):
Okay, so it's about making the industry more
appealing to a wider range ofpeople.
Speaker 2 (09:21):
Exactly and creating a pipeline of skilled workers.
Speaker 1 (09:25):
So what about those institutional investors?
Speaker 2 (09:27):
Yeah.
Speaker 1 (09:28):
Is there any way to kind of regulate their impact?
Speaker 2 (09:30):
It's tricky but, some cities and states are
considering taxes orrestrictions on corporate home
ownership to prevent them frombuying up too much.
Speaker 1 (09:41):
That seems reasonable .
Speaker 2 (09:42):
Yeah, the goal is not to ban them entirely, but to
make sure there's a levelplaying field.
Speaker 1 (09:45):
Right.
Speaker 2 (09:46):
For everyone Exactly To have a chance.
Yeah, the goal is not to banthem entirely, right, but to
make sure there's a levelplaying field Right For everyone
.
Exactly.
Speaker 1 (09:51):
To have a chance.
Speaker 2 (09:51):
Yeah, and another idea is to incentivize selling
to owner occupants rather thaninvestors.
Speaker 1 (09:59):
OK, so like giving tax breaks.
Speaker 2 (10:00):
Yeah, exactly Like tax breaks for people who are
buying a home to live in.
Speaker 1 (10:04):
Makes sense.
Yeah, it feels like there'sfinally some light at the end of
this tunnel.
Speaker 2 (10:08):
Yeah, it's a step in the right direction.
Good, but finding the rightbalance is crucial.
You know we need a healthy andequitable housing market.
It's not just about buildingmore homes, yeah, it's about
building the right kinds ofhomes in the right places.
Speaker 1 (10:26):
Okay.
Speaker 2 (10:26):
And making sure everybody has a fair chance.
I like that To access them.
Speaker 1 (10:31):
That's really good.
So, this is a complex issue.
Speaker 2 (10:34):
It is.
Speaker 1 (10:35):
But it's really exciting to see so many
solutions.
I agree being explored.
Speaker 2 (10:40):
It feels like we have an opportunity to create a more
inclusive and sustainablehousing market for the future.
Speaker 1 (10:49):
Absolutely, and the more we understand this stuff,
the better equipped we are tomake a change.
Speaker 2 (10:55):
Exactly.
Speaker 1 (10:55):
And advocate for things.
Speaker 2 (10:57):
Advocate for change.
Yeah, in our own communities,exactly.
Speaker 1 (11:00):
Yeah, it really shows how this affects everything.
Speaker 2 (11:03):
It does.
It's not just about finding aplace to live Right.
It impacts the whole economy,our communities.
Speaker 1 (11:08):
Yeah.
Speaker 2 (11:09):
Even things like social mobility.
Speaker 1 (11:11):
So it's about having a good quality of life, yeah,
and like the freedom to go afteryour dreams.
Speaker 2 (11:15):
Exactly when housing costs are high.
It just puts a strain oneverybody's budget.
Speaker 1 (11:20):
Makes sense.
Speaker 2 (11:21):
And that means less money for other things you need
like health care or education,or just enjoying life.
Exactly, and it can stop peoplefrom moving to places with
better jobs.
Speaker 1 (11:33):
Or better schools.
Speaker 2 (11:34):
Exactly.
Speaker 1 (11:35):
It's like you're stuck, even if you want
something better.
Speaker 2 (11:38):
And when there's not enough affordable housing, it
really hurts lower incomefamilies and individuals.
Speaker 1 (11:45):
Makes it harder to get ahead.
Yeah, it does, it's likehousing should be a basic need.
Speaker 2 (11:50):
It should be.
Speaker 1 (11:51):
Not just something you buy and sell.
Speaker 2 (11:52):
I agree.
Speaker 1 (11:53):
So what role do you think technology will play in
the future of housing?
Speaker 2 (11:57):
Well, we're already seeing technology change the
real estate industry.
Like those online platformsconnecting buyers and sellers.
Virtual tours.
Speaker 1 (12:07):
I love those.
Speaker 2 (12:07):
Yeah, you can view properties from anywhere.
Speaker 1 (12:10):
Yeah.
Speaker 2 (12:10):
And even AI powered tools Right, helping us figure
out property values.
Speaker 1 (12:15):
I even heard about 3D printed houses.
Speaker 2 (12:17):
That's right.
Speaker 1 (12:19):
Is that for real?
It is.
Speaker 2 (12:20):
That's crazy, and who knows what's next.
Speaker 1 (12:22):
Yeah.
Speaker 2 (12:23):
Things like modular construction could totally
change how we build.
What's that?
That's where you build thehomes off site in a factory.
Oh and then you put themtogether on location.
Speaker 1 (12:34):
That's interesting.
Speaker 2 (12:34):
Yeah, it could be, a game changer.
Speaker 1 (12:36):
So it sounds like we're on the edge of a housing
revolution.
Speaker 2 (12:38):
It does feel that way .
Speaker 1 (12:40):
But how do we make sure this technology helps
everyone helps everyone.
That's the big question.
Speaker 2 (12:49):
Yeah, technology can be used for good or bad.
We have to be careful andsupport policies that make sure
everyone benefits.
Speaker 1 (12:53):
So it's not just about having the technology,
it's about using it the rightway.
Speaker 2 (12:57):
Exactly For the right reasons.
It's about empowering people.
Speaker 1 (13:01):
Yeah.
Speaker 2 (13:01):
Not leaving them behind.
Speaker 1 (13:03):
We've talked about a lot today.
Speaker 2 (13:05):
We have.
Speaker 1 (13:05):
From the history of the housing shortage to all the
factors causing it.
Speaker 2 (13:10):
Yes.
Speaker 1 (13:11):
And some really cool solutions.
Speaker 2 (13:12):
There are some promising ideas out there.
Speaker 1 (13:14):
It's not a simple issue.
Speaker 2 (13:16):
No, it's not.
Speaker 1 (13:16):
But I think we understand it a lot better now.
Speaker 2 (13:19):
I agree.
Speaker 1 (13:20):
And I hope our listeners feel like they can do
something to make a difference,it's important to be informed.
Yeah, the more we know, thebetter we can navigate this
market and advocate for a systemthat works for everybody.
Speaker 2 (13:33):
That's the goal.
Speaker 1 (13:34):
And don't forget, there are resources out there to
help Right If you're lookingfor specialized housing,
especially for special needs, orif you're interested in
property investment.
Our friends at FlowersAssociates are the experts.
Speaker 2 (13:48):
They are.
Speaker 1 (13:48):
You can give them a call at 901-445-8148.
Great people, and for those ofyou who want to stay out of the
curve and learn about howtechnology is shaping real
estate, robert Flowers has a newbook out.
Speaker 2 (14:03):
I heard good things about that.
Speaker 1 (14:05):
It's called AI Strategies for Real Estate
Entrepreneurs.
Speaker 2 (14:08):
Catchy title.
Speaker 1 (14:09):
And it's available on Amazon.
Check it out.
It's a great resource.
Speaker 2 (14:12):
It is.
Speaker 1 (14:12):
Well, this has been a fascinating deep dive it has
Into the world of housing.
Definitely I hope you learnedsomething new today.
Speaker 2 (14:18):
Me too.
Speaker 1 (14:19):
And feel ready to join the conversation.
Speaker 2 (14:21):
It's an important one .
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