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