Danielle Hale, Chief Economist at Realtor.com, joins TheStreet to discuss what has to happen for home prices to come down
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00:00And so what has to happen for homes to become more affordable beyond just a baby step?
00:05And do you see this happening anytime soon?
00:08Yeah, in order to really improve housing affordability, we need to add more housing capacity.
00:13So we need to see more for sale and more for rent homes that are built, so generally these
00:18single family and multifamily homes.
00:20Builders have been making progress.
00:22They've been building at the upper end of their historical ranges, but we had a really
00:26big poll to dig out of.
00:28Estimates from Realtor.com suggest that it was somewhere between 2 and 7 million homes
00:32that we were lacking over the last decade.
00:35We build about 1 to 1.5 million homes each year, so we've got a multi-year problem to
00:42build out of, and I think it's just going to take some time.
00:46Fortunately, everyone seems to be aware of the problem and agree on its existence.
00:51It's just a question of how do we take steps to encourage builders to build more and to
00:55make it easier for builders to build more effectively to solve this problem.
01:01And so how much of the problem is a private sector issue versus a public sector issue?
01:06And by that, I mean private sector being the builders, but the builders need land that
01:12is public.
01:13Yeah, so there are ways that policy, not necessarily Washington and federal policy, but it's often
01:21local land policy can either help or hinder builders' ability to meet this demand.
01:25So zoning has been a hot topic lately, and upzoning or increasing the density that is
01:34available or permissible in different areas is something that can help.
01:39It is the case that if you were to replace a single-family home with townhomes or a duplex
01:45that does create more housing in the same sort of space without having to create more
01:49land or sprawl out into further areas and suburbs and exurbs.
01:53And so I think localities that are thinking about this and making changes to permit higher
01:59density zoning are going to see the benefits.
02:03They're not going to come immediately or overnight, but they are going to see the benefits over
02:06time.
02:07And we have seen a lot of changes.
02:08At the state level, California has been an innovator, and at the city level or metro
02:13level, St. Paul and Minneapolis have also been leaders when it comes to densifying the
02:21existing land use.
02:23And so I think we're likely to see those policies pay dividends over time.