LIZ: OKAY.
ARE YOU IN THE MARKET TO BUY A
HOUSE?
THIS WEEK THE AVERAGE FIXED RATE
FOR A 30-YEAR MORTGAGE CAME IN
AT 3.75%.
NOW THAT IS A SLIGHT GAIN FROM
LAST WEEK, BUT MORE THAN A FULL
PERCENTAGE POINT BELOW THE 4.68%
FROM JUST A YEAR AGO.
SEEMS LIKE A BUYER'S MARKET, BUT
THE ANSWER MAY NOT BE SO CLEAR.
LET'S GET TO THE STAR OF THE HIT
BRAVO TV SHOW "MILLION DOLLAR
LISTING LOS ANGELES".
HE'S THE REAL ESTATE AGENT WITH
2 BILLION DOLLARS IN SALES UNDER
HIS BELT.
JOSH FLAGG JOINS US NOW IN A FOX
BUSINESS EXCLUSIVE.
YOU LOOK SO L.A., JOSH.
THANKS FOR JOINING US.
>> THANK YOU.
LIZ: LET'S GET TO THIS QUESTION
OF WHETHER -- IT SEEMS LIKE AN
OBVIOUS BUYER'S MARKET BECAUSE
THE 30-YEAR FIXED RATE IS SO
UNBELIEVABLY LOW, AND, YOU KNOW,
THE FEDERAL RESERVE MAY MEET
NEXT WEEK AND DECIDE TO CUT
RATES AGAIN.
>> WELL, HERE'S THE THING, AND I
WROTE AN ARTICLE ON THIS, WHICH
ACTUALLY A LOT OF REALTORS
THOUGHT WAS REALLY FASCINATING
BECAUSE THEY DIDN'T THINK ABOUT
THIS BEFORE, BUT LET'S
HYPOTHETICALLY SAY YOU BUY A
HOUSE RIGHT NOW, YOU ARE AT A
LOW INTEREST RATE.
MAKES SENSE.
BUYER'S MARKET.
LET'S DO IT.
IF THE PRICES ARE DROPPING OVER
THE NEXT FEW YEARS, POTENTIALLY
THE INTEREST RATES ARE GOING TO
GO UP, WOULDN'T YOU RATHER BUY A
HOUSE FOR A MUCH LOWER PRICE AND
TWO YEARS FROM NOW AND PAY
HIGHER INTEREST RATE OR WOULD
YOU WANT TO PAY TOP DOLLAR STILL
AT A LOWER INTEREST RATES?
LIZ: I DON'T KNOW, THAT'S WAY
TOO COMPLICATED TO ME.
I LOOK AT RATES AND SAY YOU
SHOULD BUY NOW.
YOU WOULD GET A FAIRLY PRICED
HOUSE AT THE LOW INTEREST RATES.
THE PROBLEM IS INVENTORIES, WE
SAW NEW HOME SALES DAY MONTH
OVER MONTH DOWN ABOUT 7/10 OF A
PERCENT.
OBVIOUSLY THAT'S BECAUSE THERE'S
A REAL LACK OF INVENTORY
WHAT ARE YOU SEEING ON, LET'S
SAY, MIDDLE OF THE ROAD HOMES,
NOT THE FANCY PANTS STUFF FOR
THE STARS?
>> OKAY, NOT THE FANCY PANTS
STUFF FOR THE STARS.
YOU KNOW, I CAN'T TELL YOU ABOUT
INVENTORY, YOU KNOW, IN THE
MIDDLE OF THE COUNTRY RIGHT NOW,
WHAT'S GOING ON THERE.
I CAN TELL YOU ABOUT INVENTORY,
REGARDLESS OF PIECE, INVENTORY
IN LOS ANGELES.
THERE IS A LITTLE INVENTORY, BUT
THERE IS A A LOT OF INVENTORY IN
CERTAIN SECTORS.
FOR INSTANCE, THE MODERN WHITE
BOX, WHICH ALL THESE DEVELOPERS
HAVE BEEN BUILDING FOR, YOU
KNOW, THREE OR FOUR YEARS,
THAT'S FLOODED RIGHT NOW.
THAT MARKET IS FLOODED WITH
THESE MODERN WHITE BOXES AND
WHEN YOU HAVE SO MANY OF THEM
AND THEY ALL LOOK THE SAME, YOU
HAVE A PROBLEM, AND BECAUSE OF
THAT THE PRICES ARE DROPPING.
YOU HAVE THE MEGA HOUSES --
LET'S SAY 40 MILLION, 30
MILLION, WHATEVER, IF THEY ARE
SELLING AT 20 MILLION, THEN THE
20 MILLION DOLLARS HOUSES ARE
NOW SELLING AT 10.
AND THE 10 -- IT'S CYCLICAL --
WILL SELL FOR 5 AND SO ON DOWN
TO THE 1 MILLION DOLLARS HOUSES.
EVERYTHING AFFECTS EVERYTHING.
GOING BACK TO WHAT YOU WERE
SAYING ABOUT THE INTEREST RATE
THING, THINK ABOUT IT FOR A
SECOND.
IT IS SIMPLE.
WOULD YOU PAY 2 MILLION DOLLARS
FOR A HOUSE AT A LOWER INTEREST
RATE OR WOULD YOU PAY AT A
SLIGHTLY HIGHER INTEREST RATE
1.5 MILLION?
THAT'S WHERE -- WHY I THINK THAT
PEOPLE AREN'T REALLY BUYING
RIGHT NOW.
THEY ARE WAITING TO SEE WHAT
HAPPENS AND MY CLIENTS ALWAYS
SAY TO ME, I DON'T UNDERSTAND,
WHY DON'T THEY JUST BUY THESE
HOUSES, LOW INTEREST RATES?
IT IS AFFORDABLE BECAUSE THEY
KNOW IT IS GOING TO KEEP GOING
DOWN.
LIZ: YOUR SELLERS ARE ASKING
THAT, I WOULD IMAGINE.
HOW CLOSELY DO YOU WATCH POWELL
AND COMPANY AT THE FEDERAL
RESERVE?
WE HAVE THE FED ANNOUNCEMENT
NEXT WEEK -- IN COUPLE WEEKS,
OCTOBER 30TH.
>> YOU KNOW, I'M NOT FOCUSED ON
THAT.
INTEREST RATES ARE GOOD.
MY CLIENTELE IS REALLY MORE
INTERESTED IN GETTING A DEAL.
THEY ARE NOT REALLY AS
INTERESTED IF IT'S 3.75 OR 3.8.
MOST PEOPLE SHOULDN'T BE THAT
CONCERNED WITH IT.
YES, OF COURSE, EVERY POINT OR
EVERY FRACTION OF A POINT
COUNTS, BUT WHAT YOU SHOULD BE
CONSIDERING RIGHT NOW IS HOW TO
GET THE BEST DEAL ON A HOUSE AND
TIMING BECAUSE THAT'S ALWAYS
GOING TO BE MUCH MORE IMPORTANT.
YOU CAN ALWAYS REFINANCE.
WHEN PRICES GO UP, THEY GO DOWN,
WHATEVER.
OVER TIME, IT WILL HIT THIS
AGAIN.
I DON'T KNOW WHEN, BUT, YOU
KNOW, FOCUS ON THE DEAL, NOT THE
INTEREST RATE.
LIZ: YOU KNOW WHAT?
YOU JUST STATED IT PERFECTLY.
RATES WILL PROBABLY GO LOWER, SO
YOU WAIT AND GET A BETTER DEAL
ON A HOUSE AND MAKE PEOPLE DROP
THEIR PRICE.
WHAT ARE YOU SEEING WITH YOUR
CELEBRITY CLIENTS?
ARE THEY VERY SAVVY WHEN IT
COMES TO WAITING, OR ARE THEY
EAGER TO JUST --
>> NO --
LIZ: SOME OF THEM ARE SELLING
TOO; RIGHT?
>> HERE'S THE THING ABOUT
CELEBRITY CLIENTS.
YOU NEVER DEAL WITH THE CLIENT.
YOU DEAL WITH THE BUSINESS
MANAGER OR THE ATTORNEY, WHICH
IS GOOD AND BAD BECAUSE BUSINESS
MANAGERS USUALLY KILL THE DEAL
BECAUSE THEY WANT TO SHOW OFF TO
THEIR CLIENTS THAT THEY ARE
TRYING TO PROTECT THEM.
NEVERTHELESS IF YOU CAN MAKE THE
DEAL, THE BUSINESS MANAGER IS
REALLY ADVISING THEM, LET'S BUY
RIGHT NOW, LET'S SELL RIGHT NOW,
INTEREST RATES, WHATNOT, BUT AT
THE END OF THE DAY, THE
CLIENT -- HE'S GOING TO ADVISE
THAT TO THE CLIENT AND THE
CLIENT IS GOING TO SAY I WANT
THIS HOUSE.
I LOVE THIS HOUSE.
PLEASE.
THEY ARE GOING TO SAY OKAY, I'M
LETTING YOU KNOW THE POTENTIAL
OF YOU SHOULD MAYBE WAIT, MAYBE
YOU SHOULDN'T WAIT.
SO CELEBRITY CLIENTS ARE ALSO A
DIFFERENT ANIMAL.
I MEAN, THAT'S -- YOU SHOULD
REALLY FOCUS ON LIKE MY CLIENTS
THAT ARE JUST WEALTHY PEOPLE
THAT WANT TO BUY HOUSES.
THEY ARE JUST KIND OF CHILLING
FOR THE MOMENT, NOT DOING
ANYTHING BECAUSE THEY ARE
WATCHING THE MARKET.