It's a pretty amazing exchange, and one that speaks well of our country at this late date.
She says you 'can't outlaw murder,' which of course is misspoken somewhat: murder is outlawed in all fifty states. Still, when addressing someone as prominent as the President of the United States, it's not surprising if you get nervous and don't speak as clearly as you would at your dinner table. To his credit, the President did not pretend to misunderstand her for rhetorical advantage.
He does say something I think needs clarification:
"[W]hat you said about murder rates and violent crime generally is something we don’t celebrate enough,” he agreed. “The fact of the matter is that violent crime has been steadily declining across America for a pretty long time. And you wouldn’t always know it from watching television. Now, I challenge the notion that the reason for that is that there is more gun ownership. Because if you look at the where the areas are with the highest gun ownership, those are the places that the crime hasn’t dropped down that much."I'm not sure if this statement is false, or if he's just thinking of 'the areas' at a specific level where it happens to hold true statistically. What I think is true is that gun ownership rates have declined somewhat in spite of a vast increase of real numbers of firearms, which is to say that somewhat fewer people own many more guns. These people are the sort of people who have wealth to invest in durable goods they don't require for survival. By that I mean that once you have about three guns, if you chose carefully, you've covered your bases: a rifle for distance shooting including hunting, a shotgun for small game or home defense, and a handgun to fight your way back to the longarms. If you buy more than that, it's because you like or collect the things, or participate in sports involving specialized arms, or something similar.
So, if 'the areas' means 'areas where middle to upper-middle class households with money to invest in guns,' I don't think it's true that the crime rate is especially high in those areas. If it hasn't declined much, it's only because those areas are small ball for violent crime in the first place.
Still, maybe he means something else. It'd be helpful if he would expand and clarify these remarks, because I'm not sure what he's getting at. The decline since 1993 or so is so sharp -- we're talking about a halving of violent crime -- that it would be really strange to find many places where crime 'hasn't dropped down that much.' The ones that come to mind are the poorer regions of cities like Chicago, which have robust gun control laws but also serious poverty, drugs, and gang problems. Those aren't the people who accounted for the vast increase in private firearms that these two are discussing.