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Realogy CEO on the State of the Housing Market

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    Realogy CEO Richard Smith on the sustainability of the housing market’s recovery.

  • Duration 4:30
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Home sales up almost 6% last month to a seasonally adjusted rate of just over five million that's them.

Highest level since November of 2009.

When buyers were rushing to close deals in order to benefit from a federal tax credit.

Remember those days.

And November sales up more than 14% from the -- regard joining us now is Richard Smith he's the chairman CEO of religious corporation.

The parent many prestigious -- -- brands including Caldwell banker ERA century trying to one and -- And dying first -- say welcome to Richard good to see you and -- I have to knowledge of primate to the audience that.

I do -- real -- stock and I want to make it very clear if this doesn't happen very often but it -- I was like you know.

Full disclosure up the market is this rebound in housing for real.

-- one -- to just look at the report today and then come to some conclusion -- this is the beginning they would have to back -- as today's report is irrelevant in that regard.

Back up to the third or fourth quarter of last year when we were forecasting in the early stages every memory.

So he had to see their roots of -- recovery and they were clearly there there're couple things missing however.

We had a Pepsi month over month growth with should this report makes it very clear 6% in this a year over year growth this report make -- where.

15% year career that's a sizable increase.

In year over year activity.

-- you all so had to see prices start to move upward.

He had to have the market telling you that pricing that home values were undervalued.

And then then what will the market bear -- -- -- react to that.

The median price in this report is up 10% -- that's a fairly dramatic change than.

To the extent this is sustainable which we have believed for some time that it is -- -- in the numbers.

The correction in housing and housing pricing is a strong indication of the sustainability of this recovery.

The housing market right now he is by all appearances.

Far outperform the real economy.

The rest of this fifteen trillion dollar plus economy.

Why is that -- some things work in when all the work -- the world is trying to hero words going house going to get there housing is quietly going about the process of doing what it normally does the deals with the ebb in flow life.

-- of one point two million new household formations every year in spite of the economics.

65% of those folks are gonna become homeowners and that's that's clear.

You have -- -- deeply discounted mortgage rate that he or finally paying attention to it's not gonna stay there forever.

If you look at the peak to trough -- -- down 34%.

In some markets it's even down 50% CU and people recognize.

At values not gonna stay there and again that's on the even across the country or area or even -- any and that's a very important point.

Because in a recovery it will be on -- and every markets that are react little differently pricing will react differently.

So we're seeing that play out and those are very strong indications as to sustainability.

-- -- it's for real and it's a -- I am no sir.

Let's turn -- fiscal point of speaking of things that aren't real bought and aren't sustainable and that is the way in which.

The White House and speaker Boehner.

And congress are proceeding here.

They've got to come up with a deal.

It would seem.

Or we're going to him.

Twelve days it's a -- This tragic about this is they're doing this at the last minute but -- so often do.

What you're seeing now is a Saber rattling boy you actually need to to issue and I both know to get a deal done parties.

That can make a decision in the room and make a decision.

This back and forth is the equivalent of giving -- documents to lawyers and -- them to negotiate -- material but doesn't happen.

-- -- -- -- Do you think that we are going to see the mortgage.

Deduction removed from the tax there's -- talk about that I seriously doubt that that's foundational its institutionalized them -- and also on the US economy.

There's some Saber rattling that regard there may be tweaking around the edges but I think the mortgage interest deduction secure.

-- -- -- -- I think it's going to be tough before Christmas.

I think there's a better chance but only a 30% chance by December 31.

There's a risk of moves in the January.

And that's a -- for the markets that's right Richard -- -- have you with -- --

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