This is a partial transcript from Your World with Neil Cavuto, August 25, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.
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NEIL CAVUTO, HOST: Forget about all that talk that rising mortgage rates would throw cold water on the hot housing market. Today, we found out that existing home sales jumped 5 percent in July to a record level, putting the market on track to post its best year easily ever. But how long can it last?
Let’s ask someone in the know. Coldwell Banker’s Chief Executive Alex Perriello who joins us in our Fox Central.
All right. Alex, good to have.
ALEX PERRIELLO, CEO, COLDWELL BANKER: Good to see you, Neil.
CAVUTO: This surprised a lot of people. Is it just sort of a rush of fence-sitters getting off the fence, though?
PERRIELLO: I think a little bit of that happened in July, but I really believe that what we’re seeing is a tremendous momentum in the real-estate market right now, driven by good demographics in both the upper end of the market and also for first-time buyers.
Even though there’s been a rise in interest rates over the past 30 to 45 days, they’re still relatively low when you look at it historically, and we’re seeing median home price increases literally all across the country. So I think those three things are driving the market.
CAVUTO: But are you also seeing those increases in some markets ebbing a little bit, that it’s no longer kind of the double-digit advance we’ve seen in some hot markets?
PERRIELLO: Well, the National Association of Realtors just did a very interesting study through the first six months of the year comparing median sale prices across the entire country in 126 markets, and, for the first time since 1982, every market in the study was up.
Now, of that, about 40 markets were in the double digits, the rest in single digits, but to have every market, every major metropolitan market up over the previous year -- first time it’s happened in history.
CAVUTO: But there’s eventually going to have to be a point where buyers, or the sellers say uncle, right? I mean would the seller then be less inclined to, you know, hike the price of his or her house when they know that a potential buyer could be priced out?
PERRIELLO: Well, it’s all a matter of inventory right now, and what we’re seeing is there’s about a 4-1/2-month supply of inventory right now. That’s going to be the key factor to watch, Neil.
That’s about 2.4-million homes are still for sale right now. Ideally, it should be closer to six months’ supply. So it’s still a seller’s market. So that’s the key to look at, is inventory levels.
CAVUTO: So still supply and demand...
PERRIELLO: Still supply and demand.
CAVUTO: And, right now, demand is betting over supply.
CAVUTO: All right. Thank you, Alex Perriello. Appreciate it.
Coldwell Banker CEO.
PERRIELLO: Thanks, Neil.
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