This is a partial transcript from "Your World with Neil Cavuto," August 8, 2005, that was edited for clarity.

NEIL CAVUTO, HOST: What if I told you that all of this talk of a housing bubble (search) is much ado about nothing, that the media is talking it up, because the media missed the Internet bubble (search) and wants to cover its butt this time around?

That's what Neil Binder thinks. Neil is a principal over Bellmarc Realty in New York. But Quentin Hardy disagrees. Quentin is a Silicon Valley bureau chief for "Forbes" magazine, where his house is worth about $22 million.


CAVUTO: Damn right.

All right, so, Quentin, you are not buying this, right?

HARDY: Well, you know, Neil, this is my third bubble. I was in Japan in the early '90s, and then I was out in the Valley in the late '90s. And now I'm here for this one.

And every time, people tell you, history has changed. There won't be a downturn. Ignore the cycles. This time, it's exempt. Blame the messenger if he's negative. You know, the third time, Neil, I got to have learned something.

CAVUTO: Yes. But, Neil, you're arguing that, since everyone is saying there's a bubble, there is not a bubble, right?

NEIL BINDER, PRINCIPAL, BELLMARC REALTY: Well, you know, it's very simple.

If the press is going to say that it's smooth sailing and everything is going to be great, I don't think there's going to be a lot of papers sold and people turning on the TV. I mean, if we say there's a hurricane coming, I'm sure a lot of people will be anxious to spend a lot of time and attention figuring out what to do.

I feel that, right now, the fundamentals continue to be strong. Yes, there will be times when there are rises and lowering in the market, to a degree, but that doesn't mean...

CAVUTO: Now, that's an important distinction.


CAVUTO: There are some markets, for example, on the east coast of Florida, where the rises have been 35, 40 percent a year. Do you see that continuing?

BINDER: Yes, I do.

CAVUTO: Really?

BINDER: I think that, in markets with higher demand because of zoning issues and limitations...

CAVUTO: That's going to put some people's condos on a par with GM. That can't continue.

BINDER: Well, I wouldn't want to be on a par with GM, to be honest with you.


BINDER: I think that I would rather be in real estate (search), because I think that, given the underlying buyer demand, the structural nature of low interest rates (search), which are going to continue.

I don't care whether the Fed raises them, raises rates or not. Pension plans, insurance companies and other financial institutions are no longer enamored with equities. They're now looking at the income flow.

CAVUTO: But, eventually, rates keep going up.

Quentin, your point has been they'll become certainly less enamored with housing, right?

HARDY: I'm sorry, Neil. It's hard to concentrate when you're having a deja vu as strong as I am right now. This sounds just like Tokyo in '89 and Silicon Valley in '99. And this man is saying that it will just go up forever at these record rates, that history-breaking rates will just be sustained.

That doesn't happen. Look, and it's not just limited onshore here. There's a housing bubble around the world at record rates. Savings rates are falling to nothing, because people are plunging money into housing. High-risk loans are being written against these, mortgages nobody has ever seen before.

CAVUTO: Point well taken.

Neil, what do you think of that? A lot of frothiness, a lot of people flipping properties?

BINDER: I don't think that, because the change in credit scores coming from the conventional archaic rules, that we have high risk.

CAVUTO: But really, in all seriousness, you can't think some markets can see 30, 40 percent appreciation year in and year out, right?

BINDER: Absolutely.

CAVUTO: Really?

BINDER: I mean, I don't see any reason why, if there's an increased surge in demand in a given market, I think, in New York, we'll continue to see a high surge. The gentrification happening in Manhattan, particularly has not really changed to any major, major degree.

CAVUTO: Quentin, there's another wacky theory I have in this, that because the media missed the Internet bubble, right, not you, but the rest of the media, that now there's a collective guilt about it and that we're sure as hell not going to let that happen again. So, hence, housing bubble. What do you make of that?

HARDY: You know, I can kick the media around all day. And we do miss plenty of things. And I don't think the media as one is lined up saying there's a housing bubble.

I kind of question that assumption. But the fact of the matter is, we do have to report things like rising commodity prices that causes interest rate pressure. We have to report things like increasing employment, which increases interest rate pressures, means inflation pressures are there.

CAVUTO: But increasing employment also increases demand for housing, too, right?


HARDY: When savings is nothing and people are getting over everything, I know they will fight to keep those houses. But it is going to be tough.

CAVUTO: So, you see a housing crash? You see a housing crash?

HARDY: You know it, it doesn't crater the way stocks crater.

CAVUTO: Right.

HARDY: But it gets really bad. In Southern California, they went down 30 percent. It takes a long time to recover from that.

CAVUTO: So, these hot markets, very quickly, that we're showing, Neil, you don't see anything slowing that down?

BINDER: No, not in the ones that I'm acquainted with. In fact, if anything, I think the strong economy and the fact that a huge burden of these new baby bombers coming back in that were my generation are fueling the market and will continue to.

CAVUTO: Neil, final word on the subject.

Quentin, good having you. We'll see what happens.

HARDY: Good to be here.

Content and Programming Copyright 2005 FOX News Network, L.L.C. ALL RIGHTS RESERVED. Transcription Copyright 2005 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon FOX News Network, L.L.C.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.