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Anthony Sanders, George Mason professor of finance, on December’s housing data and the real estate outlook for 2013.
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Anthony Sanders -- different time we'll see it is professor of finance at George Mason university and we are so pleased to welcome you back dampening great to CEO.
Thanks Lauren doesn't Davis signal a step back for housing or is it just dead -- up in an otherwise.
Firm's stable yet slow housing recovery.
At this point and call it pick up to I think in 2013.
We're gonna see.
A good year.
Rest bear in mind -- last year's housing prices until December were actually back at 19992000.
Levels by -- I.
It was nice gain in 2012.
Do you think that will improve this here or we'll just as he said -- I think it'll improve a little but the problem is is that it's taken us this long to get over the Clinton administration disastrous national.
Homeownership.
Strategy so we're probably back to the subtle point.
And I think it'll go up but again credit -- tight and so don't look for really a lot of expansion.
-- -- have to confiding in my producer set ask him what.
The worst case scenario is what is keeping Anthony Sanders up at night regarding housing so go go on.
If the fact that every time I try to buy a house in Virginia it keeps getting -- from underneath my feet what is happening.
I think what's happened is after this the first year cannot and sequestration got.
Kind of pushed down the road a little bit I think a lot of people are now saying oh my gosh they're not really gonna do this are that -- Other might but -- think that's a lot of people this we're waiting and waiting and waiting that's why the December was slow.
I think now that December's lower and they see the congress courses -- -- knew anything about spending there that they feel more relaxed and start buying homes again.
So that's the -- there.
Another -- -- -- cross with you and that is all of this us surrounding the discount rate which of course is the interest -- the Federal Reserve charges to banks.
To let banks borrow money from the Fed this was highly encourage during the financial crisis and what we are learning now from the Fed documents released five years later.
Is that perhaps as Treasury Secretary Timothy Geithner wasn't exactly forthright.
About whether or not he -- ticked off some of those big banks -- the Fed may.
In -- did ultimately end up lowering that discount rate but this impact the housing market.
Well -- again if you look at a chart of house prices.
Existing home sales -- any housing metric.
Against Fed Funds rate in any kind of discount rates you'll see that there.
It's actually great chart you can see housing prices -- going one kind of but they lowered the Fed rate housing prices start going up in the going quick quick raising quick so.
We can kill off the housing market they raise them quickly know what happened.
The killed off the housing market collapsed.
It's it's very important right now weren't a state -- like Japan.
-- easing easing easing in Japan's housing prices -- actually are -- the state of freefall.
Just like Spain and they're doing -- it's not clear how much we're gonna be able to get -- Big sustained recovery or housing bubble although I think -- panel it was very concerned about that.
This is not enough credit out there FHA's tightened Fannie and Freddie are tight.
Unless the federal government through there GSCs.
And FHA decide to expand credit.
Which they might do.
We're just not gonna see that big of a housing recovery.
Okay -- -- think -- the damage done by that whatever the church's secretary's role was is is behind us we have the transparency on interest rates.
And understanding of what's involved to get a mortgage to move past this into your initial -- with me that we'll continue to see satisfactory recovery house.
How we should see satisfaction recovering and -- -- I think -- in terms of secretary Geithner I read.
Fed.
President lakers' us.
Comments on that previews on.
Yeah I think that was just kind of out of bounds for Geithner should inform fifteen yard penalty -- Based or are they gonna stop that.
Right right Anthony -- -- would be surprised they don't thank -- so much appreciate your now Wexler.
So escorted -- we do every fifteen minutes let's check the markets Nicole -- --
