This is a rush transcript from "Your World," May 9, 2011. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST OF “YOUR WORLD”: Well, you heard the news today, oh, boy, about housing prices continuing to swoon in the last quarter from just the quarter before, and in the latest month from just the month before.
So, let’s say the trend ain’t exactly housing’s friend.
But wait till you hear how long it won’t be housing’s friend or yours.
With me now, realtor Katrina Campins.
Katrina, spell it out.
KATRINA CAMPINS, CEO, THE CAMPINS COMPANY: As a real estate professional, I’ve been advising my clients to buy for the long term.
And I’ve also been advising them that their prices may go down before they see stability or any kind of real appreciation in the market. My opinion is, is that the tax credits really prolonged the inevitable. It just prolonged the pain.
I would’ve preferred to have seen a mark-to-market approach, where we would have just allowed the market basically to determine supply and demand, and the prices would’ve -- reflect accordingly. I’m not a big believer in artificial stimulants. I’m a believer in the real deal.
CAVUTO: So, it just sort of dragged out the agony, right?
CAMPINS: It did.
And now you have people that purchased because of the tax credit that now are seeing the prices go down, and so for -- they have less equity in their home. They’re suffering. And, you know, the cycle continues. The positive note is that we have seen a growth really in wage and job growth. And that is going to help improve the market. But we still have a three- year inventory nationwide. And we need to reach equilibrium.
CAVUTO: But isn’t that well off its high? But isn’t that well off its high, Katrina, that inventory?
CAMPINS: That inventory is about three years. And we need to reach six months of inventory in order to really be at equilibrium. So, the...
CAVUTO: And how long -- how long would that take?
CAMPINS: I -- in my opinion, it’s going to take about two to three years. And I think we’re slowly seeing the market recover.
CAVUTO: So, two to three more years -- two to three more years of this. You can’t tell me this because...
CAMPINS: Two to three more years.
CAVUTO: ... my home is already the valuation of a Cinnabon. So, you’re -- you’re -- and I’m talking the roll, just the roll. So...
CAMPINS: Right. But we’ve seen -- you have to keep in mind that we’ve seen the lion’s share of depreciation already take place. And I think there’s probably another 10 percent there. And then we’re going to see the market rebound. But there’s things that have to happen, like...
CAVUTO: Another 10 percent? But, you know, they were saying that -- not you -- I don’t remember what you were saying -- but last year, they said...
CAVUTO: ... oh, we’re going to cap out right now, 2 to 3 percent. You’re talking another 10 percent on top of that.
CAMPINS: It’s going to take -- there are a lot of -- there are a lot of factors right now in the economy.
First of all, the economy needs to continue to do well.
CAVUTO: You just need jobs. The end result...
CAVUTO: There’s no mystery to this. You need jobs, right?
CAMPINS: We need jobs. We need wage growth. And we need the economy to improve.
CAVUTO: I know that, but it’s ultimately jobs, right?
CAMPINS: We need jobs. We need wage growth. We need the economy to improve.
CAVUTO: You have jobs; you have more people who have the wherewithal to buy a house.
CAMPINS: That’s -- that’s -- that’s one of the factors. That’s one of the factors.
One of the things that people don’t realize is that the banks haven’t completely released all of the shadow inventory foreclosures that they have. So, that needs to happen as well. So, slowly, these things need to happen. And we need to give time, but we also need to be proactive and really get into the marketplace. So...
CAVUTO: Yes, but you’re telling people...
CAMPINS: ... it’s going to...
CAVUTO: ... that, you know, you’re looking at a few years of this. What’s to behoove them to do that?
CAMPINS: About two to three -- about two to three years, I think it’s going to take.