Where Barbara Corcoran Says to Buy Real Estate

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Aug. 1 (Bloomberg) -- Corcoran Group Founder Barbara Corcoran discusses real estate and the Zillow and Trulia deal on “Market Makers.” (Source: Bloomberg)

The business that used to compete with each other every day of the week, and they've join hands.

Now they control 60% of all the eyeballs have any interest in finding a new home.

Everybody goes online and will be looking at one website if this deal goes through.

It is the big gorilla.

No doubt about it.

They have pricing power.

They can charge as much as they want for ads.

They can charge whatever they want for advertising, including brokers who have to advertise.

They need the brokers to get the listings.

The listings need them to be found.

It is a simpatico relationship.

For how long?

They have the platform everybody wants to be on and needs to be on.

If i could interrupt you.

To have that platform, they must have a full grip on all the listings.

For that, you need the real estate broker to get the agreement signed and put it on the listing.

It is good news for trulia.

Couldn't you have made that argument for travel agents back in the day?

Where are they now?

They are gone.

They are simply -- were simply a provider of information to the consumer.

The real estate broker has a connection to the seller.

They have to get the listing.

That is the important difference.

Everyone who has ever sold a home has in many cases come to resent the 6% you have to give up on the purchase price.

Is there anything you can see that is going to change the pricing power real estate agents have over clients?

I don't think so.

The only thing that controls the pricing is competition.

If one broke reduces their commission, the next was have to compete with that.

That is still in the hands of the brokers provided they are similar in what they charge.

I don't see that changing.

What about for sale by owner?

Do brokers have to sweeten the deal to get customers?

That has always been the argument.

That is why the owners would threaten the commission.

It does not work out that way because not enough people have the time to market their properties themselves even though they have a huge platform like trulia or zillow.

Still that number is not increasing.

Why do we not see more real estate brokers offering lower commissions?

Would you?

If i thought it would get me more business.

Once upon a time, before online advertisements, you needed a broker because the broker was your key to market.

Now trulaia and zillow are the key to the market.

There is less of a value proposition in hiring real estate brokers.

Prices have gone up.

The broker is collected more money than 15 years ago.

I am just looking for some free market dynamics.

The broker today can offer more.

I am not even a real estate broker anymore.

I am friendly to the real estate community.

You are in the industry.

I pay commissions.

I should be on the other side of the fence an opinion and still am not.

The broker who gets an exclusive on a property can say i will market your property to the whole world.

They pop it on any of the big websites.

It used to be more limited.

On top of that, you still need someone to manage the egos in the negotiations.

Leave in the hands of the homeowner and those negotiations do not work out as favorably for themselves.

Why do brokers need advertising?

The majority of people wind up finding their real estate agent through friends or family.

Why do they need zillow or trulia?

They want to reach the listings.

The best way to do that is to have it on a giant website.

That is where they come in.

They are of like boardwalk and park place with a big hotel on each.

What happens to the brokerage community when the guy that owns them gets wiped out?

The rest of the spots are owned and controlled by brokers.

It is meaningless.

You don't want to be on atlantic avenue.

Or baltic, even worse.

Do you still have an endorsement deal with homes.com?

I don't think i ever had one.

I will have to check on that.

I think the way back, i did.

What does this mean for smaller outfits in the business that were competitors with trula and zillow?

It is a game changer.

It is so hard to compete for the next closest rival is redfin.

It is like comparing a guppy to a shark.

The others are like minnows swimming by and watching the action.

The market changed 10 years ago when the "new york times" classified section went from 14 pages 21. that is an indication of how this market has changed.

Do you think more sellers will come on the market?

What prices will go through the roof.

We are not even getting started yet.

Prices will go to the moon and back.

Just watch.

What is the appreciation of what i just bought two years ago?

Where is your place?

That is going down, too.

You don't even know where it is.

Why is there an area that will go down and others will not?

Park slope is golden.

It is to brooklyn what part places to manhattan.

Where are you investing?

Outskirts of new york city.

I listen to the gay waite and where they are livingrs.

Seriously?

That is brilliant.

They go in early.

They approve -- improve an area.

When they go in, put your money in and you will make money.

You will see the nightclub action, the first indication an area will pop.

I like the columbia university area.

That is where i am investing.

Parts of it are outskirts.

It is still manhattan.

There's really nothing left in brooklyn and has not been discovered.

Brooklyn is over.

They will still go up.

Stuyvesant, i bought two buildings there 14 years ago.

It doubled in value the first few years.

Then we had the financial crisis.

Everybody lost in the financial crisis, just about everybody in real estate lost in the financial crisis.

Do you like anything outside of new york?

You always lose your shirt when you go into somebody else's ballpark.

What is the business -- biggest risk to the housing market?

Interest rates going up.

At first, it will help prices.

If they go up, that will hurt the market when people give credit for.

The executive at blackrock manages fixed income.

He is worried about the impact student debt will have on the real estate market.

That the amount of student debt students are carrying will prevent them, a whole generation of first-time homebuyers, from coming into the market.

He is right.

It has been the case for the last five years.

Everybody is moving home.

They cannot afford the debt and to buy.

Despite that, the housing market is increasing.

It holds it back but it is not a big player.

These are new households you are seeing formed?

Everything.

Upgrade buyers, new households, second-home market.

The last to recover, now doing fine.

The housing market had such a bad chapter that everybody is making up for lost time.

It is so great to have you

This text has been automatically generated. It may not be 100% accurate.

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