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John Levy, John B. Levy & Co. president, on the Federal Reserve’s decision to keep interest rates historically low, and how this impacts the rea...
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Pretty big boost.
Here the look of course with a lower interest rates in question is are they gonna lift the real estate investor's confidence as well -- -- -- gonna look like.
John Levy president of John B Levy and companies here with more on this -- first -- -- The Federal Reserve stimulus plan was supposed to help.
Regular housing.
Participants hasn't really done that you're saying it's totally -- the commercial real things -- I.
Well I think it has helped to housing -- help little bit more -- fed is now buying.
More mortgage backed securities.
Therefore housing finance is going to be cheaper more people are -- -- qualify for houses.
It's going to be easier for them to buy houses and it's going to be cheaper.
Now the interesting thing is the indirect effect on real estate is actually think it hurts.
Multifamily.
Because you know that multifamily been kind of the darling check of this last for five years and everybody said trees -- guy and multifamily is better every year.
But with housing prices kind of bottoming and starting up we've had a six year bottom in housing.
People are gonna start buying houses and when they buy -- out of a single family single -- And when they don't when they buy -- house they don't rent.
So if he said what's the the silver lining the silver lining is single -- looks like it's starting to come up but I think multifamily is kind of hit the top.
And in the next year -- we're gonna look what we.
-- -- start to see the equation you know do I went to led by and the numbers would really start are really start to come out more towards that you should buy.
We should well I mean who rates are below 4% so they're giving you the money there's stand back it up take as much as you can.
If you can bar for less than 4% for priority years but it's a matter of qualifying a lot people -- an issues with that let's talk commuters commercial real estate though.
What areas in particular very election right now what we like a couple things we like hotels.
And we like hotels because -- business related and as the economy hopefully grows they can raise rents.
Every night so well located hotels we like.
We like medical office buildings have -- -- -- it's kind of interesting because you would think that.
-- the Republicans would say we don't like medical office buildings because.
You know obamacare is gonna -- thinks people are gonna leave medicine none of that doesn't matter where the Republican when you're Democrat.
Everybody likes medical office buildings especially.
On the campus of hospitals.
So right this isn't in whom -- I don't move basically right that's exact set up your office it really doesn't matter people still come to see you -- -- does -- view it doesn't matter who's elected.
And you can get the most right wing Republican you'll still say I like medical office -- let's talk quickly about this 700 billion dollars in commercial mortgages that are set to mature over again next year to what happens with -- they can be able to refi us now.
Well.
350 billion dollars this year 350 billion dollars next year round numbers.
The interesting thing is sixty some percent of those are over a 100% of value.
So they can't be -- -- so does that mean we're gonna see a little bit of a dip in the commercial market.
I don't think the dip in the commercial markets quite the right thing I think what's happening is most of the insurance companies have gotten rid of the bad stuff is CMBS is -- -- the market.
Where you really going to have the problem is in the community banks.
The regional bank will -- the banks and I think you see this a lot with the with the right with with smaller developers small borrowers say I can't get a loan.
From my local and it hurts the little people yet again yup sounds like you're stuck thank you very much of the UNS -- buddy John -- Levy and company thank you so.
All right well coming up our American Airlines pilots slowing down the airline on purpose.
