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American Morning
Minding Your Business: When Will Bubble Burst for New Home Sales?
Aired April 28, 2003 - 07:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: It makes talking about houses a little bit trite, but important to a lot of people out there. It is time for "Minding Your Business." All this morning, we're looking at the real estate market.
The housing sector continues to be the standout performer of an otherwise sluggish economy. Sales of new homes shot up over 7 percent in March, the biggest gain in seven months.
How long can this go on? That is our focus this hour.
We're bringing in CNNfn's Gerri Willis, author of the "SmartMoney Guide to Real Estate Investing." She is filling in for Andy Serwer. Andy is going to hang out with Paula at night for a while, and so you get this pretty lady, Gerri Willis is joining us.
BILL HEMMER, CNN ANCHOR: Good morning, Gerri. Great to have you here.
KAGAN: It's good to have you. It's good to meet you in person.
GERRI WILLIS, "SMARTMONEY" MAGAZINE: Thanks for having me here. It's great to be here.
KAGAN: Let's look at this housing market. You just -- the prices, they just keep getting crazier and crazier in so many cities.
WILLIS: You bet, you bet.
KAGAN: When is the crash? I think especially buyers want to know.
WILLIS: Well, you know, it's absolutely true. Over the last five years, prices are up 38 percent; 6 percent last year alone. Everybody is asking, when does the crash come? I think what you're going to see, absolutely no nationwide housing crash. It just doesn't happen if you look at history. But there are some markets that could fall. Some markets are at risk.
KAGAN: And what are those markets?
WILLIS: Well, the way you figure out which market might crash, look at housing sales. Are they slowing down? Look at jobless rates. You want to know are people being laid off in big, big numbers. This is pretty easy to see. So once you start looking across the country, the names of the towns that pop out are ones you probably already know. It's San Francisco, it's New York, it's Boston. This is where we've seen the economy sort of crater after the dot-com boom, and these cities are most at risk to have falling prices, or at least prices that just don't go anywhere for a long time.
HEMMER: What about the converse of that? The good cities (UNINTELLIGIBLE), where do you find them?
WILLIS: Well, now, you look at cities that have great affordability. Houses are affordable. People have jobs. Jobs are growing. Look at Charlotte, North Carolina. Look at Jacksonville. And in California, Riverside and San Bernardino. These are areas where prices are set to take off.
HEMMER: What...
KAGAN: Go ahead.
HEMMER: Markets today? Taking off or not?
WILLIS: Well, I think we're going to have see. We've got a lot of interesting numbers coming out this week. I think you want to look at those jobless rates at the end of the week that are coming out.
HEMMER: Yes.
WILLIS: That's going to tell us a whole lot. People are still obsessed with earnings. They're not looking that great. So I think it's a wait-and-see. You know, I keep telling people there's more than just one market out there.
HEMMER: Yes.
WILLIS: There's also real estate.
HEMMER: That's right.
KAGAN: Keep (UNINTELLIGIBLE) diversify, diversify, diversify.
HEMMER: Thank you, Gerri. Good to have you with us; throughout the week, too.
WILLIS: Thank you.
HEMMER: We'll see you next hour.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
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Aired April 28, 2003 - 07:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: It makes talking about houses a little bit trite, but important to a lot of people out there. It is time for "Minding Your Business." All this morning, we're looking at the real estate market.
The housing sector continues to be the standout performer of an otherwise sluggish economy. Sales of new homes shot up over 7 percent in March, the biggest gain in seven months.
How long can this go on? That is our focus this hour.
We're bringing in CNNfn's Gerri Willis, author of the "SmartMoney Guide to Real Estate Investing." She is filling in for Andy Serwer. Andy is going to hang out with Paula at night for a while, and so you get this pretty lady, Gerri Willis is joining us.
BILL HEMMER, CNN ANCHOR: Good morning, Gerri. Great to have you here.
KAGAN: It's good to have you. It's good to meet you in person.
GERRI WILLIS, "SMARTMONEY" MAGAZINE: Thanks for having me here. It's great to be here.
KAGAN: Let's look at this housing market. You just -- the prices, they just keep getting crazier and crazier in so many cities.
WILLIS: You bet, you bet.
KAGAN: When is the crash? I think especially buyers want to know.
WILLIS: Well, you know, it's absolutely true. Over the last five years, prices are up 38 percent; 6 percent last year alone. Everybody is asking, when does the crash come? I think what you're going to see, absolutely no nationwide housing crash. It just doesn't happen if you look at history. But there are some markets that could fall. Some markets are at risk.
KAGAN: And what are those markets?
WILLIS: Well, the way you figure out which market might crash, look at housing sales. Are they slowing down? Look at jobless rates. You want to know are people being laid off in big, big numbers. This is pretty easy to see. So once you start looking across the country, the names of the towns that pop out are ones you probably already know. It's San Francisco, it's New York, it's Boston. This is where we've seen the economy sort of crater after the dot-com boom, and these cities are most at risk to have falling prices, or at least prices that just don't go anywhere for a long time.
HEMMER: What about the converse of that? The good cities (UNINTELLIGIBLE), where do you find them?
WILLIS: Well, now, you look at cities that have great affordability. Houses are affordable. People have jobs. Jobs are growing. Look at Charlotte, North Carolina. Look at Jacksonville. And in California, Riverside and San Bernardino. These are areas where prices are set to take off.
HEMMER: What...
KAGAN: Go ahead.
HEMMER: Markets today? Taking off or not?
WILLIS: Well, I think we're going to have see. We've got a lot of interesting numbers coming out this week. I think you want to look at those jobless rates at the end of the week that are coming out.
HEMMER: Yes.
WILLIS: That's going to tell us a whole lot. People are still obsessed with earnings. They're not looking that great. So I think it's a wait-and-see. You know, I keep telling people there's more than just one market out there.
HEMMER: Yes.
WILLIS: There's also real estate.
HEMMER: That's right.
KAGAN: Keep (UNINTELLIGIBLE) diversify, diversify, diversify.
HEMMER: Thank you, Gerri. Good to have you with us; throughout the week, too.
WILLIS: Thank you.
HEMMER: We'll see you next hour.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.
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