MARIA: WELCOME BACK.
MORTGAGE RATES NOW AT A 20-YEAR
HIGH.
TAKE A LOOK AT THE 30-YEAR FIXED
RATE, SKYROCKETING TO NEARLY 7%
THIS WEEK.
RISING INTEREST RATES CONTINUING
TO COOL DOWN THE HOUSING MARKET.
THE FEDERAL RESERVE AIMING FOR A
SOFT LANDING FOR THE ECONOMY,
BUT MY NEXT GUEST BELIEVES THE
HOUSING MARKET IS IN SHAPE AND
HEADED FOR A, QUOTE, CRASH
LANDING.
THE PEOPLE’S CORPORATION --
PEEBLES CORPORATION FOUNDER AND
CHAIRMAN, DON PEEBLES, IS WITH
US.
HE HAS REAL ESTATE DEVELOPMENT
PROJECTS ALL ACROSS THE COUNTRY.
THANKS FOR BEING HERE.
>> GREAT TO BE HERE.
MARIA: YOU KNOW, WHEN I SAW THE
HOUSING STARTS NUMBERS OVER THE
LAST FEW MONTHS, I KNEW THAT
HIGHER RATES WERE BEGINNING TO
CREATE DEMAND DESTRUCTION.
HOW WOULD YOU ASSESS MARKET
RIGHT NOW, AND WHAT DO YOU SAY
ABOUT 7% MORTGAGE RATES RIGHT
NOW AND THE IMPACT?
>> I THINK THE HOUSING MARKET IS
ON ITS WAY INTO A RECESSION.
WE’RE GOING TO SEE PRICE
DECLIENTS.
THEY’VE ALREADY BEGUN TO TAKE
PLACE.
INTEREST RATES HAVE COOLED
DEMAND SIGNIFICANTLY BECAUSE
DEBT SERVICE ON A SINGLE FAMILY
MORTGAGE OR A HOME MORTGAGE HAVE
GONE UP MORE THAN 100% NOW.
SO YOU’VE PRICED A LOT OF BUYERS
OUT OF THE MARKETPLACE.
I LOOK AT THIS AS THOUGH WE HAVE
THIS FREIGHT TRAIN OUT OF
CONTROL, SPEEDING UP, SPEEDING
UP WITH LOW INTEREST RATES, AND
NO ONE LOOKED TO START SLOWING
IT DOWN OR STEPPING ON THE
BRAKES.
NOW ALL OF A SUDDEN IT’S GOING
TO COME CRASHING INTO THE
STATION.
THE MOMENTUM IS TOO STRONG IN
THE HOUSING MARKET TO SLOW IT
DOWN RIGHT NOW.
SO WHAT’S HAPPENING RIGHT NOW,
THESE INTEREST RATE INCREASES
ARE GIVING MODERATE SLOWDOWN,
BUT YOU’RE GOING TO SEE AT SOME
POINT THE ECONOMY AND THE MARKET
REACT TO IT VERY AGGRESSIVELY,
AND THE PENDULUM’S GOING TO
SWING, AND PRICES ARE GOING TO
DECLINE RAPIDLY.
MARIA: PRICES DECLINING IN TERMS
OF THE PRICE OF A HOME.
AS RATES MOVE HIGHER, THAT MAKES
YOUR MORTGAGE THAT MUCH MORE
EXPENSIVE MONTHLY.
IS THAT CAUSING PEOPLE TO SAY IS
FORGET IT, I’M NOT GOING TO BUY
THAT HOME NOW?
I WANT TO GO RENT?
AND THEN THEY GET GET INTO THE
RENTAL MARKET, AND THERE’S
STICKER SHOCK THERE AS WELL.
>> YES.
I DO BELIEVE THAT MORE AND MORE
PEOPLE WILL STAY IN RENTAL
HOMES, OR THEY WON’T TRADE UP.
ONE OF THE IMPORTANT PARTS OF
THE HOUSING MARKET IS HOMEOWNERS
TRADING UP FOR A LARGER HOME OR
RELOCATING TO ANOTHER GEOGRAPHIC
LOCATION AND BUYING A NEW HOUSE.
THAT ACTIVITY IS GOING TO SLOW
DOWN DRAMATICALLY AND HAS BEGUN
TO ALREADY.
AND THEN RENTAL, WHILE RENTAL
RATES HAVE GONE UP, THE
IMPORTANT ASPECT TO LOOK AT IS
IT’S STILL A LOT LESS EXPENSIVE
TO RENT THAN IT IS TO OWN.
AND THAT IS WHAT’S GOING TO
COMPEL MORE PEOPLE TO RENT, AND
THAT’S WHY I BELIEVE THAT
REPRESENT ARAL HOUSING IS GOING
TO CONTINUE -- CAN RENTAL
HOUSING IS GOING TO CONTINUE TO
BE RESILIENT, BECAUSE IT CAN
PASS ON INCREASES TO IT
CONSUMERS.
MARIA: IT’S A A GREAT POINT,
BECAUSE WHEN YOU LOOK AT THOSE
COMPANIES THAT HAVE PRICING
POWER, THOSE ARE THE ONES THAT
ARE GOING TO DO WELL EVEN IN A
40-YEAR-HIGH INFLATIONARY
ENVIRONMENT.
I WANT TO GET YOUR TAKE ON WHAT
ALL OF THIS MEANS FOR THE
MIDTERM ELECTIONS.
WHAT ARE YOUR EXPECTATIONS GOING
INTO NOVEMBER, AND THEN I’VE GOT
TO GET YOUR TAKE ON WHAT JUST
WENT ON IN THE L.A. CITY
COUNCIL, BECAUSE I KNOW YOU’VE
GOT DEVELOPMENTS THERE AS WELL
AS ACROSS THE COUNTRY, FLORIDA,
NEW YORK.
WHAT ARE YOUR EXPECTATIONS FOR
THE MIDTERMS, DON?
>> I THINK THAT YOU’RE GOING TO
SEE THE REPUBLICANS TAKE CONTROL
OF BOTH CHAMBERS OF CONGRESS.
I THINK THESE HIGH INTEREST
RATES, THIS POOLING OF THE
MARKET, THIS FLUCTUATING JOB
MARKET DEPENDING ON GEOGRAPHIC
LOCATIONS AND THE FEAR OF A
GREATER RECESSION HAVE MANY
AMERICANS, MOST AMERICANS
FEELING THAT THE COUNTRY’S GOING
IN THE WRONG DIRECTION.
AND SO IT’S GOING TO LOOK TO
MAKE A CHANGE.
AND THEN WE’RE GOING TO SEE A
SEISMIC CHANGE IN 2024.
MARIA: YEAH, WHAT ARE YOUR --
>> MORE LIKE 1980.
MARIA: I’M SORRY, DON?
>> IT’LL BE MORE LIKE 1980.
WE’RE RIGHT NOW IN 1978 WHEN
CARTER WAS PRESIDENT AND
INTEREST RATES WERE BEING USED
TO CONTROL INFLATION BECAUSE
INFLATION WAS OUT OF CONTROL,
AND IT DIDN’T WORK.
AND IT, ULTIMATELY, STRANGLED
THE ECONOMY.
AND I THINK THESE INTEREST RATE
INCREASES ARE GOING TO HAVE THE
IMPACT OF STRANGLING OUR
ECONOMY, ESPECIALLY THE HOUSING
MARKET.
MARIA: YEAH.
I JUST WISH THEY UNDERSTOOD WHAT
THEY WERE DOING.
IT JUST DOESN’T SEEM THEY’RE
ACKNOWLEDGING THE IMPACT OF THIS
BAD POLICY AT ALL.
DON, I KNOW YOU’VE GOT
DEVELOPMENTS IN L.A., AND YOU’VE
GOT THOUGHTS ON WHAT JUST LOOK
PLACE IN THE CITY COUNCIL.
>> VERY SHOCKING.
WE HAVE A $1.6 BILLION
DEVELOPMENT IN DOWNTOWN LOS
ANGELES, AND COUNCIL MEMBER
KEVIN HE LEONE’S DISTRICT, AND
TO MY SHOCK, HE WAS RECORDED
MAKING RACIST COMMENTS ALONG
WITH THESE OTHER TWO WITH
COUNCIL MEMBERS.
AND WE COULDN’T FIGURE OUT,
FRANKLY, HE’D BEEN IN THE CITY
COUNCIL FOR TWO YEARS.
WE’RE BUILDING THE LARGEST
ECONOMIC ENGINE IN HIS DISTRICT
CAN, COMMITTING TO 30% MINORITY
AND WOMEN-OWNED BUSINESS
CONTRACTING, AND WE’VE ONLY BEEN
ABLE TO MEET WITH HIM ONE TIME
FOR 15 MINUTES IN 24 MONTHS,
WHICH WAS AMAZING.
BUT NOW THOSE RECORDINGS MAKE US
UNDERSTAND IT.
WHAT’S REALLY DISAPPOINTING IS
MY PARTY, THE DEMOCRATIC PARTY,
HAS -- CAN REPUBLICANS SO
FREQUENTLY, ESPECIALLY THE
FAR-LEFT ALMOST OF OUR PARTY,
AND YET WE HAVE THESE
ULTRA-LIBERAL DEMOCRATS IN A
ROOM MAKING THESE RACIST
COMMENTS ON HOW TO DILUTE THE
VOTING IMPACT OF
AFRICAN-AMERICANS.
AND THAT’S SOMETHING THAT THEY
HAY -- ACCUSE THE REPUBLICANS
OF.
I MEAN, I AM SO DISAPPOINT9, SO
’EM EMBARRASSED AND SO ANG ALLY
ABOUT THIS KIND OF CONDUCT OF
OUR PARTY.
AND I THINK THAT
AFRICAN-AMERICANS ARE GOING TO
BEGIN TO TAKE A CLOSER LOOK AT
SOME OF THESE LEFTIST POLICIES
AND HOW THEY HAVE A NEGATIVE
IMPACT ON OUR COMMUNITY.
MARIA: YEAH, THAT’S VERY
DISCOURAGING.
AND I KNOW THAT IS ONE OF THE
REASONS THAT SO MANY IN THE
BLACK COMMUNITY, THE HISPANIC
COMMUNITY AND, BY THE WAY,
INDEPENDENTS OVERALL, THE
INDEPENDENT BLOC, THE
INDEPENDENT VOTER, THEY’RE
MOVING TO THE GOP RIGHT NOW.
WE’LL SEE WHAT THOSE MIDTERMS