More from the Milken Institute’s Global Conference last week. Two big players in the housing market, two views of what’s going on.
Richard Smith, President and CEO, Realogy Corp, the nation’s largest real estate broker with Coldwell Banker, ERA, Century 21 and others. (That’s him in the photo.)
“The focus generally has been on the foreclosure issue, it’s a small sliver of the buying market. We are the largest seller of bank owned homes. It takes 117 days, the average purchase price is $107,000, 65% are first time buyers. The rest are mom and dad picking up rental or investment property. The free market is dealing with this quiet effectively. There’s natural process here. The low end will correct. Eventually the high end will come around. Do we want to sit around and wait two years from that? How do we jump start that?
I spend all my time on the demand side.The demand side must be the solution. We’ve been a strong proponent of lower rates. We’ve been a strong proponent of the 4% mortgage rate. It’s had the effect of limiting the impact. It’s had a favorable impact on first time buyers, but it hasn’t gone broad enough.”
Steven Mnuchin, is chairman and ceo, OneWest Bank Group, which is the new name for IndyMac bank, the lender that collapsed and taken over the feds last year. “Loan modifications and other government programs, combined with lower rates have become to have an impact,” he said. “The new FHA program are very significant. They are allowing people to buy homes. All these things you’re beginning to see are having an impact.”