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For housing joining us now is Richard here.
Chairman and CEO of real -- the parent company of many you know many rules -- -- according Coldwell Banker ERA century 21.
A whole bunch more -- DC Richmond could barely.
Let's start with with housing the news continues.
To be positive.
And yet we see a lot of attention in the business press and elsewhere.
Then it's good that it's over -- that it can't sustain what -- -- Well it should be bush all the news is evidence of that and this is we just went through an asset correction was announcing.
Downturn there was an asset -- literally housing prices reset.
-- -- -- the recovery stage.
Took seven years again this it's not gonna recover overnight it's going to be a long -- duration recovery but clearly that is what's happening.
We will not -- of that and in that regard to your call back in the first or second quarter of last year.
We were in the third and fourth quarters principally because -- small sustainable price increases.
So demand is simply outstripping supply right now crisis reacting to that are.
Him and we keep hearing that there just isn't sufficient inventory.
What does that mean and how big a problem.
Both first quarter is never -- quarter to judge inventory is always the worst quarter it's not our season the best season for housing second third quarter that's when the most activity occurs -- that said inventories up about 9% since January so it's doing what they should be doing.
And it's coming back in the market is there women toward builders are building so that's adding -- -- Underwater equity homes now are suddenly no longer under underwater on their equity early -- -- percentage of them.
They're coming back in the market -- new inventory and just the seasonal swing of business is coming back into the market instruments or so immature will correct there's some more than enough the man.
To meet that inventory need at night and price is reacting to.
Now we've all -- -- well -- One part of the business press is talking about they're all sorts of problems.
Another part of the business press is talking about bubbles are we've got to diversity of you out there -- in the business press.
What is the reality -- we have a bubble building here.
But -- we're back about 4050% of pricing pre 2005.
So it's unlikely that were anywhere near bubble but this look at it in this can't.
Keep lending and underwriting standards pre -- five.
Were abysmal record and that's why we have this problem today lending underwriting standards today arch willingly -- So the likelihood of -- whole class of people defaulting on loans going forward.
Clearly isn't gonna happen look at Fannie and Freddie is -- -- of profits thus far.
They're underwriting as pristine credit risk is -- so the likelihood of that bubble being created because of underwriting is very unlikely.
For Freddie and Fannie and the word pristine gulf.
I had it in my -- by a recent experts didn't to go together it's good to hear you use that expression.
We're we're also hearing from the that.
Where it removal.
The regulators are saying well maybe the bank suggests that we've got a major problem to me it's interesting that.
The principal regulator of our commercial banks is saying we've got a problem with the banks and he regulates what what your reaction.
-- I think the banks are great chip I mean what's holding the banks back from -- -- perspective mortgage finance there's no private market.
And principally because the government regulations are not supported.
Creating a private market.
So until they resolve the final regulations under Dodd-Frank.
The lenders are gonna -- lend to the highest possible underwriting standards.
Every spike go score in this country today is a hundred basis points higher than it should be and everyone knows that.
So resolve the regulatory issues finally define what.
Qualified residential mortgage means under Dodd-Frank lenders will start then becoming more realistic and their underwriting standards.
And we're off to the races with respect to -- now that's we're doing quite well even with these very difficult underwriting standards.
During court -- indeed with.
We're all that is going on.
You talk about government regulation I conceive of clincher with a -- just a little bit.
I shouldn't sort of councillor Wilson now lies and also investor in religion Stockton.
I want everyone to do work.
Thank you so much appreciate -- Richard and the continued success thank you.
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