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American Morning
Sales of Existing Homes Fell to Two-Year Low in July; Immigration Debate
Aired August 24, 2006 - 08:36 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: Look, if you're hot to sell Pluto -- oh, I'm sorry, to buy or sell a home, there's a steady decline in the housing market is no doubt leaving you a bit cold. Sales of existing homes fell to a two-year low in July. As for the reasons why, and what we can expect in the months ahead, Bob Hagerty joins us from "The Wall Street Journal." He is that paper's housing reporter, and he joins us from Pittsburgh.
Bob, good to see you.
BOB HAGERTY, "THE WALL STREET JOURNAL": Good morning.
HARRIS: Folks are asking why, why now? I bought this house, I was planning to flip it -- oh, that might be a bad word -- I was planning to turn it over in a couple years, and now this happens. So what can you tell us about the timing of this slump?
HAGERTY: Well, just be glad you didn't buy property on Pluto.
HARRIS: We worked it back in, see? there you go.
HAGERTY: Really it's just a matter of supply and demand, I think. A couple years ago, we were really short on houses in a lot of the markets. Now we've got a glut. So that means buyers are taking their time and prices will have to come down.
So this is going to be really tough for folks who need to get out of the home now, say a transfer or moving to a new city for a new job, this could be tough?
HARRIS: That's right. It depends a lot on where you live. The real run-up in prices was mainly along the coast -- Florida, Arizona and parts of Nevada. For the rest of the country, the market has been pretty calm, and there aren't going to be any great lurches, I don't think.
HAGERTY: So what do you do now? I mean, this sounds like, wow, this sounds like a buyer's market, is it?
HARRIS: Oh, definitely, and that's good news for a lot of people.
And we're talking about people who maybe stayed on the sidelines and couldn't buy when there was a huge run-up that now might be the time to get in the game? HAGERTY: That's right. I guess the problem is, they don't know has the market bottomed out yet. So a lot of people will continue to dither for a while, and that's what's going to keep things slow until confidence comes back.
HARRIS: Well, Bob, what do you think? Has the market sort of bottomed out? Everybody's talking about a hard landing, a soft landing. What do you make of all that?
HAGERTY: Well, nobody knows how hard it's going to be. It's certainly going to be painful for some people. It may last another year or two. It could last three or four years. Experts are really divided on that. And mostly, it depends on how the economy does, and nobody knows how the economy's going to be doing in a year or two from now.
HARRIS: So if the market continues to slow, what happens to prices? Do they come down? I would hope they would come down. Or is there a chance they may just sort of stagnate?
HAGERTY: Well, they are coming down in some places, parts of Florida, parts of California, the Washington D.C. area. Boston, they're definitely coming down. But they're coming down slowly. House prices don't drop 10 or 20 percent overnight like stock prices can. So it would probably be gradual, and it might take a year or two before things bottom out.
HARRIS: You mentioned some of the markets where prices are starting to come down a bit. We've got a graphic here. We can sort of illustrate that for you. Over the last year, medium prices, say in Naples, Florida, down eight percent, Ft. Myers, Cape Coral down five percent. Those are still pretty expensive homes in Sacramento County, California down five percent. And then you talk about the Virginia suburbs of Washington, down almost four percent, and this is a situation where the prices may still come down, in your estimation, or might they hold here for a while?
HAGERTY: Oh, I think they could come down further. But of course, we've got to remember that they more than doubled in most of those markets in the past four or five years, so most people are still doing pretty well.
HARRIS: Hey, do you have a prediction? We're supposed to get some numbers, new home sales numbers, at about 10:00 a.m. this morning. Any thoughts?
HAGERTY: Well, the new home sales numbers are very unpredictable. It's based on a very small sampling, so I wouldn't take them too seriously. They bounce around all over the place.
HARRIS: Okay, Bob, appreciate it. Bob Hagerty, "Wall Street Journal" housing reporter. Bob, thanks for your time.
HAGERTY: Thank you.
O'BRIEN: Speaking of housing, the director of FEMA says a lack of housing on the Katrina-damaged Gulf Coast remains his top challenge for his agency. David Paulison visited children at an elementary school in D'Iberville on Wednesday. He said FEMA's considering replacing trailers with cottages. Congress has appropriated $400 million for the Katrina cottages, as they're called.
The anniversary of Hurricane Katrina, drawing attention from Washington, D.C. Senate Democratic leader Harry Reid joins Louisiana Senator Barry Landrieu, visiting two schools and meeting with hurricane victims today. Also, the head of the recovery effort and the education secretary will meet with higher education officials in New Orleans. President Bush will visit the region on Monday and on Tuesday.
We'll be live in New Orleans on Tuesday, August 29th. It's going to be a special edition of AMERICAN MORNING, "Katrina: One Year Later."
(WEATHER REPORT)
HARRIS: And coming up, Iran says it is ready for serious talks on its nuclear program, but is it just stalling until it can build nuclear weapons? We will take a closer look.
O'BRIEN: And the dreaded SATs. Are they about to become history? Why some college-bound teenagers might have less of a reason to stress. That's ahead on AMERICAN MORNING.
(COMMERCIAL BREAK)
HARRIS: As we've been telling you, a showdown may be looming with Iran over its nuclear ambitions. Those ambitions could include the production of nuclear weapons. But how real is the threat?
CNN's Brian Todd takes a look.
(BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): From key intelligence leaders in Congress, new warnings on Iran while the regime weighs incentive packages and a deadline for suspending nuclear enrichment. They sat Teheran is also playing a familiar and dangerous game.
UNIDENTIFIED MALE: It's beyond a shadow of a doubt for me that they are trying to stall for more time to continue their uranium enrichment and the building of their nuclear program.
TODD: Congressman Mike Rogers says western leaders have been duped by Iranian diplomacy for the past three years. Rogers is a key player in the House Intelligence Committee's new report on Iran's strategic threat to the U.S. and its allies.
REP. MICHAEL ROGERS (R), INTELLIGENCE COMMITTEE: These folks are absolutely up to no good. They're developing ballistic missiles. They're developing and trying to enrich uranium. They have chemical and biological weapons programs. TODD: Information that's not new but does raise new questions about Iran's intention at this crucial moment in diplomacy. For instance, the report says the regime has produced enough of a compound called uranium hexaflouride to produce 12 nuclear bombs if it's enriched to weapons grade.
Still, U.S. intelligence leaders and outside experts have repeatedly said Iran likely won't be able to produce a nuclear weapon for at least four years. Ready now, a delivery system for any nuclear weapon. What the report calls the largest inventory of ballistic missiles in the Middle East, a capability that experts say is rapidly being developed further.
JOHN PIKE, GLOBALSECURITY.ORG: The Shahab-3, which is currently operational has a range of 2,000 kilometers, can get to Israel. Shahab-4, twice the range, 4,000 kilometers can get too much of western Europe. The Shahab-5 also under develop could get all the way to the United States, but they're years away from having that capability.
TODD: Between four and 10 years for those two longer-range missiles, according to John Pike of globalsecurity.org.
(on camera): After repeated calls and e-mails, a top Iranian official at the United Nations told us he needed more time to study the House Intelligence Committee report, but he refuted the accusation that Iran is stalling for time on the nuclear issue, and he said his government is ready to begin negotiations at any time.
Brian Todd, CNN, Washington.
(END VIDEOTAPE)
O'BRIEN: Ahead this morning, city and state governments crack down on illegal immigration. They say the Feds aren't doing enough, but are they breaking the law in the process? We'll take a look, up next on AMERICAN MORNING.
(COMMERCIAL BREAK)
O'BRIEN: Some communities across the country are deciding that the federal government isn't doing enough to control illegal immigration, so local governments are taking matters into their own hands.
CNN's Christine Romans has our report.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): Here in Hauppauge, Long Island, tempers flare.
UNIDENTIFIED FEMALE: That is un-American, too, Legislator Terecappa (ph).
UNIDENTIFIED MALE: We have the contractors who have plowed the law. We have the contractors who have not done the right thing.
ROMANS: It's a scene playing out across the country as local governments take federal immigration enforcement into their own hands. From Long Island, to Costa Mesa, California, where local police will now ask suspects their legal status, to Palm Bay, Florida...
UNIDENTIFIED MALE: They're not illegal immigrants. They are illegal aliens. We need Americans in the drywall industry. We need Americans building these new houses.
ROMANS: City leaders ultimately rejected an ordinance that would have punished employers who hire illegal aliens.
In Avon Park, Florida, a similar measure narrowly defeated. In Riverside, New Jersey, a law bans hiring or renting to illegal aliens. And in Farmers Branch, Texas, another tough measure under consideration.
It's a lot like the toughest ordinance yet in Hazleton, Pennsylvania, where starting next month, landlords will be fined $1,000 a day for knowingly renting to illegal aliens. Business permits would be denied and English the official language.
ANGELA KELLEY, NATIONAL IMMIGRATION FORUM: A lot are going to be challenged in the courts. Many are unconstitutional, because, fundamentally, the states and localities don't have the authority, don't have the jurisdiction, if you will, to be passing what are federal laws.
ROMANS: While no fan of the ordinances, Kelley says they show real frustration by local leaders and a federal failure on immigration.
(on camera): Hazleton and Riverside have quickly drawn the fire of lawsuits. The ACLU calling Hazleton, quote, our Alamo. Winning there makes all the other local ordinances elsewhere irrelevant.
Christine Romans, CNN, New York.
(END VIDEOTAPE)
O'BRIEN: Christine's report first aired on "LOU DOBBS TONIGHT," which airs weeknights at 6:00 p.m. Eastern.
(BUSINESS HEADLINES)
O'BRIEN: You guys remember the nail-biter, those SAT exams?
HARRIS: Yes.
O'BRIEN: Remember how stressful that was when you were in high school, trying to get into college? George Mason University is now part of a growing number of universities that's dropping the SATs and some other standardized tests as admission requirements, but here's the catch. It's only for top-notch students, and you need to have at least a 3.5 grade point average, and you have to be in the top 20 percent of your class.
Coming in up in our next hour, we're going to talk to the dean of admissions at George Mason, also the education writer for "U.S. News and World Report."
(NEWSBREAK)
O'BRIEN: Stay with us here on AMERICAN MORNING.
(COMMERCIAL BREAK)
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