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Boston Properties CEO Mort Zuckerman on the outlook for the housing market and the economy.
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Home prices sliding to lows not seen since 2002 meanwhile the Commerce Department reported new home sales.
Taken a steep dive in March by seven point 1%.
And Boston properties CEO Mort Zuckerman says we'd better get used to more reports like this but there is one bright spot he's here to tell us what he joins us now good to see you -- to be here -- everybody keeps -- we'll see a bottoming it almost looks like we're not even a half times here with his home prices -- where -- you.
-- yes we have seen a drop in home prices from peak to trough that exceeds the drop in the Great Depression.
I don't know where the bottom is because there is an estimated somewhere between twelve and thirteen million homes that in one form or another on the market.
So I think prices are gonna continue to be under pressure and people when they see what's happened prices they get reluctant to -- -- American public is not stupid they'd rather not buy an asset that's declining in value.
Now that -- is about this recession we have not seen a rebound from there this recession even had a rebound from the depressions in the thirties we haven't yet seen it.
The Obama administration says it's because of the magnitude of the recession.
Some people.
You suggest it's the magnitude of the bad policies that have applied to this -- When I think it's a combination of both I mean obviously we had a tremendous.
Decline in asset values we've lost pan American family -- American household net worth has dropped by ten trillion dollars in the last four years those are staggering numbers.
Real income per capita.
Has dropped.
Basic from -- 36400.
Dollars -- -- 34200.
That's the worst drop we've seen since the great depression and the only drop of that kind.
And we've seen I could go on and on their a lot of statistics indicate how weak the economy -- We get fooled to an extent by the stock -- why no rebound.
Why no rebound in the economy itself because in amongst other things what American business is doing its cutting costs.
And what American government is doing is cutting costs so there's no real stimulus over an extended period of time there is from the deficit but the deficit doesn't -- fairly.
Translate into increase consumer expenditures which are still very very weak and that's always the main driver of the economy.
Our investor audience looks to somebody like Q for an idea -- say that there's one area in the housing market regardless of this horrific number of unemployed people.
That is actually doing pretty well.
You're asking me for where that is well bullish on -- clearly not my home it's probably my neighbor's home -- kept.
-- I I I don't think really rentals is the only part of the real estate business that I know rental housing because people would rather rent them buy when so many people have lost so much money in home -- so apartments are doing fairly well.
That is the one area where you see some general improvement in -- and general improvement in occupancy.
-- -- in the middle now of a two day fed session to try to figure out what they're gonna do to help boost the economy -- What will they have any influence at all the -- or have they shot their last bullet.
Know why they have a continuing influence because they're keeping interest rates so low when you have ten year treasuries selling at a 2% yield roughly okay.
You have the first place that tells you something about the economy is not only happens when people are very pessimistic about where the economy's going.
But it does help in terms of everybody else who has to borrow money at the problem is.
That why what is going on in the economy does not incur a kind of multiplier effect that was the problem with the Obama program -- -- it's not as if we don't have deficit.
They don't they're not multiplier some of the deficit.
There at the very most dollar for dollar you should get two dollars of spending for every dollar of government deficit they they -- and a program which was frankly politically organize a not economically.
Considered.
Looking -- say for example the bigger picture the macro trend you know.
Labor costs are lower in other countries.
That's -- business tends to sometimes leave here what would bring it back to bring back the jobs.
I'm not sure that we're ever gonna be able to do that much it is very important that we -- and focus on what is important to my mind one of the things that I think it's critical.
Is what.
Andy -- call scaling up.
When you built -- when -- -- from the prototype to a major manufacturing plant for particular product.
You learn a lot through larger scale of what you're doing.
And that net -- know how is now being experience in India and in China where by the way they have a lot of talent of people.
Who were engineers in particular who are doing very well thank you very much for very effective thank you very much but are working at much lower price rates then.
What you can get here so we have to do something.
And and and very seriously to do -- you make sure for example just to give you one illustration H one B visas which are given to people with very highly skilled.
Talent that should stay in this country we -- a 195000.
Visas that made this possible in the year 2000 is now down to 65000.
This is like turning over the the greatest talent which is intellectual firepower to the very countries that compete with us and we can't get the political will to somehow -- -- bring it back at least to where we were before.
I'm getting a rap I gotta ask should the folks out there a lot of questions about this be buying some of these cheap properties that are on the market -- not I had I can't be an investor.
Advise our don't wanna do that for you -- you probably I don't -- -- and I'm in the commercial real estate business not in the residential real than most people are in the residential field.
And that market's been going down they're cheap now I think they're gonna be cheaper I mean just because of how many homes are on the market.
You know in commercial real estate is a very different thing and we're in -- particular the upper end of the commercial market.
-- thank god has done fairly well.
Mort Zuckerman a Boston properties and of course.
US news and world report thank you very much -- you mentioned the New York Daily News but you don't have to take twelve a New York Daily News.
