NEIL: ALL RIGHT, WE TALKED ABOUT
THE INTEREST RATES BACKING UP A
LITTLE BIT AND THEY'RE STILL
HISTORICALLY VERY VERY LOW BUT
FOR THOSE INTERESTED IN
REFINANCING A LOT APPARENTLY
FEEL THEIR WINDOW HAS COME AND
GONE AND UP AND SHUT AND CAMPUS
COMPANY FOUNDER AND REALTOR
JOINS US.
THERE'S BEEN A FREEZE IN THIS
ACTIVITY OR WHAT APPEARS TO BE
ONE KATRINA AND I'M NOT SURE IF
IT'S JUSTIFIED BUT IT IS WHAT IT
IS.
WE'VE HAD THESE STARTS BEFORE
BUT THIS SEEMS TO BE PURELY RATE
DRIVEN AND WE'VE HIT A POINT AT
WHICH A LOT OF POTENTIAL
BORROWERS SAID THAT'S IT.
WHAT DO YOU THINK?
>> WELL I THINK THE REFINANCE
MARKET IS DEFINITELY EXTREMELY
ALIGNED WITH THESE RATE CHANGES,
SO WHAT YOU'RE SEEING IS YOU'RE
SEEING A LARGE DECREASE IN
HOMEOWNERS WANTING TO REFINANCE
BECAUSE RATES CONTINUE TO GO UP.
WHY?
WELL BECAUSE MANY OF THEM
ALREADY HAVE LOWER RATES AND ARE
BEING OFFERED IN THE CURRENT
MARKET SO IT JUST DOESN'T MAKE
SENSE TO REFINANCE.
IRONICALLY, WE HAVEN'T REALLY
SEEN THE HOUSING MARKET SUFFER
TOO MUCH AS A RESULT OF THE RATE
INCREASES AND I BELIEVE THAT THE
REASON FOR THAT IS BECAUSE BUYER
S ARE TRYING TO TAKE
ADVANTAGE OF IT BECAUSE THEY
KNOW AND THEY SENSE THAT RATES
ARE GOING TO CONTINUE TO GO UP
SO HISTORICALLY AS YOU MENTIONED
NEIL WE'RE STILL RELATIVELY LOW
BY THOSE STANDARDS HISTORICAL
STANDARDS AND WE HAVE BEEN SPOIL
ED FOR SOME TIME NOW WITH
EXTREMELY LOW INTEREST
RATES BUT THERE'S STILL TIME TO
TAKE ADVANTAGE OF THESE RATES
THAT ARE CURRENTLY AROUND 4.45%,
4.5%.
I'VE ALSO SEEN A LOT OF SELLERS
THAT HAVE ASKED ME TO DECREASE
THE ASKING PRICE OF THEIR HOME
IN HOPES THAT THEY CAN GET THEIR
HOUSE SOLD BEFORE RATES CONTINUE
TO GO UP.
THESE SELLERS ARE ALSO GOING TO
HAVE TO PURCHASE NEW HOMES SO
I'M GETTING THOSE PHONE CALLS A
LOT WHERE A SELLER WOULD SAY
KATRINA I WANT TO REDUCE MY
PRICE I DON'T EVEN ASK THEM TO
DO IT.
THEY'RE CALLING ME TELLING ME TO
REDUCE THE PRICE BECAUSE WE WANT
TO SELL AND LOCK IN A RATE AN
INTEREST RATE CHANGE HERE WITH
THEIR PURCHASE, SO I'M REALLY
SEEING A LOT OF INCENTIVE TO BE
ABLE TO PURCHASE.
NOW I THINK LONG TERM THE
HOUSING MARKET WILL PROBABLY
SLOW DOWN AS A RESULT OF THESE
RATE CHANGES AS WAGES ARE JUST
NOT INCREASING AT THE SAME RATE
AS HOME PRICES, AND WITH THESE
INCREASES WE'RE ALSO SEEING THAT
THE BUYING POWER WILL PROBABLY
DECREASE MOVING FORWARD.
NEIL: YOU'VE ALWAYS REMINDED ME
THAT JOB BEATS RATES I THINK THE
JUST OF THAT ARGUMENT WAS IF YOU
GOT A GOOD ECONOMY AND JOBS ARE
PLENTIFUL AND SECURE AN UP-TICK
IN RATES IS AN AFTERTHOUGHT AS
LONG AS IT DOESN'T GET CRAZY I
GUESS WHAT DO YOU SEE HAPPENING?
>> WELL WE HAVE EXTREMELY LOW
UNEMPLOYMENT HISTORICALLY
SPEAKING SO THE ECONOMY IS DOING
EXTREMELY WELL WHICH IS THE
REASON I THINK IT'S IMPORTANT TO
NOTE THAT THE REASON THAT THE
FED IS ACTUALLY INCREASING RATES
IS BECAUSE THE ECONOMY IS DOING
WELL, SO WHEN THE FEDERAL
RESERVE INCREASES RATES, IT'S
GOING TO OBVIOUSLY AFFECT THE
MORTGAGE RATES, BUT OVERALL,
YOU'RE STILL SEEING PEOPLE THAT
ARE EXTREMELY OPTIMISTIC AND I
THINK IT'S ALSO VERY REGIONAL IN
STATES WHERE PRICES HAVE
INCREASED TREMENDOUSLY LIKE
TEXAS OR CALIFORNIA OR FLORIDA.
I THINK THAT YOU'RE GOING TO
BEGIN TO SEE THE HOME PRICES
STABILIZE A LITTLE BIT MORE BUT
OVERALL PEOPLE ARE VERY
OPTIMISTIC ABOUT THE ECONOMY AND
ABOUT HOUSING AND IT'S TIME TO
REALLY TAKE ADVANTAGE OF THESE
RATES NOW BEFORE THEY CONTINUE
TO GO UP BECAUSE A LOT OF
ECONOMISTS ARE SAYING WE'RE
PROBABLY GOING TO SEE THREE
DIFFERENT RATE HIKES THIS YEAR
ALONE SO TIME TO BUY BEFORE THEY
CONTINUE TO GO UP.
NEIL: THIS IS ONE OF MY OTHER
CRAZY THINGS.
I'VE NOTICED THIS ANECDOTALLY
BUT MORE AND MORE BUILDERS, BIG,
SMALL, INBETWEEN, WITH SPEC
HOUSES, IN OTHER WORDS THERE ARE
NO BUYERS FOR THEM BUT THEY'RE
BUILDING THEM AND I THINK FOR
WAS TABU THAT YOU JUST DIDN'T
RISK THAT BECAUSE YOU NEVER
NECESSARILY FIND A BUYER FOR
THAT, BUT I'M NOT JUST SEEING A
COUPLE I MEAN QUITE A FEW
POPPING UP AND I'M WONDERING FOR
THE BUILDERS DOING THAT THAT
THAT'S A GREAT SIGN OF
CONFIDENCE.
IS IT JUSTIFIED?
>> UH-HUH, I THINK THERE IS
EXTREME CONFIDENCE WITH HOME
BUILDERS NOW DAYS.
I THINK THESE HOME BUILDERS ALSO
REALIZE THE RENTAL MARKET IS
DOING EXTREMELY WELL SO IF THEY
DON'T END UP SELLING THESE
PROPERTIES A LOT DECIDE TO RENT
THEM.
YOU'RE ALSO SEEING THAT THE
RENTAL MARKET IS REALLY
INCENTIVIZING PEOPLE TO BUILD
MULTIFAMILY, THERE'S SUCH A HUGE
DEMAND FOR MULTIFAMILY AND
THERE'S NOT ENOUGH SUPPLY TO THE
POINT WHERE A LOT OF THE CAP
RATES IN THE MARKET JUST DON'T
MAKE SENSE YOU HAVE THESE LARGE
INSTITUTIONAL BUYERS THAT ARE
WANTING TO BUY MULTIFAMILY AND
IT'S EXTREMELY COMPETITIVE SO I
THINK HOME BUILDERS ARE
FOLLOWING SUIT WITH THE
CONFIDENCE AND NOTICING THE
RENTAL MARKET IS GOING TO
CONTINUE TO BE VERY SOLID SO
THEY ALWAYS HAVE A BACKUP PLAN
AND PEOPLE WANT NOW DAYS
EVERYBODY WANTS NEW AND THEY
WANT INSTANT GRATIFICATION, SO
THEY ARE VERY HAPPY WITH THESE
HOME BUILDERS AND PRODUCTS
THEY'RE OFFERING AND THERE'S
DEFINITELY BUYERS OUT THERE AND
MORE BUYERS WANT TO TAKE
ADVANTAGE BEFORE THESE RATES
CONTINUE TO GO UP.
NEIL: WELL THEY'RE PUTTING A LOT
OF GOODIES INTO THEM.
THIS MIGHT INTEREST YOU I DON'T
KNOW IF YOU'RE INTO BOCCI BALL
COURTS BUT A LOT WILL DO A BOCCI
BALL COURT FOR YOU I'LL
TELL YOU HOW TO TALK TO THE