Daryl Fairweather on the housing shortage, climate change
How did we get here?
It is perhaps an obvious statement that the market for a single-family house is one of high demand and low inventory, but few were predicting that at the start of the coronavirus pandemic — or even at the end of the last housing crash.
Today’s HousingWire Daily is an episode of the Houses In Motion series, hosted by Senior Real Estate Reporter Matthew Blake. Blake interviewed Daryl Fairweather, chief economist at Redfin, who explained how the public policies and business decisions made after the housing bubble burst in 2008 capped who is able to buy a house and led to the current inventory shortage.
Fairweather argued that these limits came as demand soared thanks to low interest rates and a shift toward millennial homebuyers. Fairweather also discussed how climate change might affect real estate going forward.
Here is a small preview of our interview, which has been lightly edited for length and clarity:
Matthew Blake: So far, we haven’t seen prices significantly decline in any area due to climate change— is that correct? Or are there parts of the country where maybe you could see the climate bubble starting to burst?
Daryl Fairweather: There are communities in Alaska that have literally relocated, who just abandon their homes and move inland. We could see more of that going forward. But we haven’t seen it in any major metro areas.
Matthew Blake: You have a climate check risk score on Redfin right now. I suppose as a homebuyer I could hypothetically say, ‘Well, climate change is omnipresent. So, if I move here, who’s to say this would not be a risk, or this would be that much greater a risk than another place?’ With how much precision can you know the risk of a natural disaster in a given place?
Daryl Fairweather: I think that when interpreting the risk score, you should treat it as kind of like going to the slot machines in Vegas, you know what the odds are but the draw on the pull you never really know. That’s the excitement of gambling. Unfortunately, when it comes to climate, I don’t think it’s that exciting.
So, if there’s a risk score of 100 it should be very concerning. If there’s a risk score of 25—I mean it’s a gamble, but everywhere is going to be a gamble.
HousingWire Daily examines the most compelling articles reported across HW Media. Each afternoon, we provide our listeners with a deeper look into the stories coming across our newsrooms that are helping Move Markets Forward. Hosted by the HW team and produced by Alcynna Lloyd and Elissa Branch. If you have a pitch or an inquiry relating to podcasts, you can reach our team at email@example.com