This is a rush transcript from "Your World With Neil Cavuto," October 21, 2008. This copy may not be in its final form and may be updated.
NEIL CAVUTO, HOST: All right, meanwhile, a FOX News Alert on this whole interest rate thing.
A realistic tracking firm says that California sales jumped 65 percent in September from a year ago. Now, do not start jumping for joy here. MDA DataQuick says a lot of this simply reflects buyers scooping up very sharply discounted foreclosed homes. Still, it is something.
And if real estate expert Dani Babb is right, it is a start.
Donald Trump is joining me on the phone right now, though, to talk about the general trend.
Donald, what do you think of this?
DONALD TRUMP, CHAIRMAN & CEO, TRUMP HOTELS & CASINO RESORTS: Well, it is an amazing number, and it all has to do with foreclosures. So, that's a very negative number in one way. And, in another way, it's down approximately 34 percent. So, certainly, that is not a very wonderful thing. But it is a great time to buy real estate, as I have been saying.
CAVUTO: All right. Now, what you have been saying, as well, is, you were seeing signs of this so-called credit freeze, this reluctance on the part of banks even to lend to one another, given Lehman Brothers folding, et cetera.
If — if — and it's a big if, as you have been stressing here, Donald — if that is no longer the case, or starting to show signs that it is no longer the case, then what?
TRUMP: Well, I don't see that being the case. I think the banks are not loaning the money right now. And a lot of banks are out there, and I guess they have a lot of government money, but they are not putting it up.
And people wanting to get end loans, even people that are well off and people that have great credit ratings and credit scores, they are not getting money from banks. And you can't get money from banks. It's pretty tough.
CAVUTO: So, the fact that some of these rates have come down, and that, at least among this small cadre of banks, the 16 or so that set key interest rates, you are not jumping the gun on that and saying, hey, we are off to the races?
TRUMP: Well, it's amazing. The rates have come down, but there is no money. So, there's no money out there whatsoever for people that want to buy apartments or houses. And that is why you seeing this tremendous drop in value.
And it's really — it really is a very tough situation, except it is a great time to go out and buy a house from the bank, especially from a bank, because they have no choice but to give you financing.
CAVUTO: Yes, but if they are reluctant, period, or hoarding cash, period, what will get them off the dime?
TRUMP: Well, they're not reluctant to get rid of the houses that they have, Neil, because they have tremendous numbers of houses in their stock. And those houses are being vandalized and ripped off. And they're hiring security firms, who are going in and then robbing the houses. Half of the security firms are worse than the people that they are supposed to be securing.
But the fact is that this is a great time to go to a bank that has thousands of houses that they want to get rid of and make a deal.
CAVUTO: So, that is what you think is going on in California? We are going to talk to a local expert there. But you think what is really going on here is foreclosed or virtually bankrupt properties being scooped up on a bargain?
TRUMP: Well, they're being scooped up at a bargain, but the banks are getting rid of them for very low prices, and probably taking back- financing, which is good.
CAVUTO: OK. So, let's say they go through this process where they get rid of the bad stuff on their books. Play that out for me.
TRUMP: Well, they get rid of the bad stuff. And then, eventually, things will start getting more normalized. But you're going to be starting from a much lower base.
The cost of housing will be at a much lower base, especially in places like California. Now, I know sections of California that have not been so badly hit. Beverly Hills is doing pretty well and different other — you know, other places in California. But, for the most part, most sections of California have been hit very hard, as is the case with Florida, as is the case with Nevada and other places.
CAVUTO: All right, Donald Trump, thank you very much.
TRUMP: Thank you very much, Neil.
CAVUTO: All right.
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