city, the new "wall street week." >> we're pleased to welcome barbara corcoran, founder of the realty firm the corcoran group. barbara: great to be here. >> let's talk about your career. starting with $1,000 and a boyfriend. what happene barbara: i lost the boyfriend. or he lost me. we were partners for seven years. i moved in with him and raised his three girls with him. we were indeed a family. we were a family at work and at home. he just happened to fall in love with my secretary. at? what? and so that ended that relationship. at the time, it was probably the hardest year of my life. in hindsight as you always know when you go through a bad time, always something good comes out of it if you hang around for it. what came out of it was the

corcoran group, my own business. >> it is very true for entrepreneurs, the ones you're interviewing, my own life experience. were you extremely nervous starting the corcoran group? barbara: no, i had something better than all of the above. i was angry. nothing is better than the scorn of a woman to show a guy who says you'll never succeed without me. i was fueled by my fury. even when we had a thriving huge business, 500, 600 people, i was near bankruptcy, i still remember those haunting words and would thinkon of e more idea to try to keep ourselves in business. i had the fuel of an impassioned woman that was determined to prove i wasn't going to fail. >> what was the first apartment you rented? >> on east 73rd street to a very lovely couple. it was way before the advent of

the internet. they were the sweetest couple. they gave me my first commission and they were from out of town and he was working for citybank. he probably referred know maybe 40 people over the next four years. he was a great asset right from the get-go. i had good luck with stumbling into the right people. >> what did you do with that commission? >> $40. i bought a coat. >> are you a spend ore a saver? >> i think money is metropolitan to be spent. see where it goes and see what i for it. it always comes back to this double fold. i have a advantage that rich kids don't have. i had nothing to start. i had nothing to lose. nowhere to go but up. you know how freeing that is for kids? license to kill. >> you made this decision to sell the company.

walk us through how difficult was it? you sold the company for $66 million. what was your mind-set then and how should people who build businesses think about the ultimate exit strategy? barbara: i think of exit strategy with every other business owner that i become friends with, it is driven by personal need. not my money. clearly when i soled sold the corcoranan group, i had got an multimillion dollar profit years in a row. i still despite my best efforts round up with $2 or $3 million in profit each year. i thought whoa, maybe this thing is worth something. >> you were reinvesting proceeds but still throwing off other cash barbara: therefore i knew probably the value. how did i arrive at $66 million? the first bid that the attorney was so happy to tell me $21

million. said i want $66 million. it was my lucky number. little t me bring a luck. they said how did you arrive at that? i said that is my lucky number. drove them nuts. they didn't like that. i had my first baby at 46. very easy for guys to talk about business when you don't have kids. i had sibling rivalry. i said i'm not doing this. i'm just going to focus on being a mom until i realized i got bored and then i had to build another business. i didn't figure that one out so well. >> you the first woman to own a real estate company in new york. barbara: then, yes. >> do women make good business entrepreneurs? for a: women don't fight territory the same way men do. men will climb to the top of the

mountain. before he is halfway up there he is pounding his chest saying i'm king of the mountain. a woman will climb the same mountain and get to the top. she will set up a kitchen, a at the present time, make sure the blankets are all right. and then shout out i might be queen of the mountain. men claim territory. women don't do it. women form better teams because of the lack of territory. the egos are not as vested. >> donald trump also made a name for himself. have your paths ever crossed? barbara: i feel like his mover, yes. i worked with donald for the better part of his career. he was the most prominent developer in new york. the most high profile developer from get-go when he converted 42nd street for new york, which changed value in the city. i will say one good thing about donald. clearly that he gives due the credit of changing the view of living in man hat on the luxury manhattan because of the trump tower. he totally changed people's attitudes. i used to go to industry events

all over the u.s. where you meet with people. yes, i sell real estate in new york. they looked at me like i'm surprised you're alive. after trump got through with trump tower, people came and said amazing. what is it like? how did that happen? he refaced manhattan. >> do you think that translates into presidential skills? barbara: no. absolutely not. you have to be normal to be president. >> you have to be normal? barbara: you have to be sem normal. he has such a big ego. you also have to function. your brain has to work. >> being a good business person doesn't necessarily mean that you're qualified to be president. barbara: being a good business person and having a successful business record is a great credential. look at mayor bloomberg. what a great credential. i'm not knocking that. i'm just saying you have to run for public office for the right reasons. you polarize and separate people

doesn't strike me as a great formula for leadership. >> it is a grueling process on the road every day. constant media appearances and having to go out. if it is just about ego, he is certainly putting in a lot of time and effort. barbara: you have to remember people who have huge egos need them fed. o but a crowd?go who feeds an ego better than media attention? the bigger the ego, the more able people like that are able to go out and absorb that they need it. they are being fed. i think that fits in perfectly with the profile. >> if he ends up completing this and gets the nomination, would you be shocked? barbara: i know when george bush was running the second time and feared that he would be nominated, i bought a house in canada. i don't know what country i'm going to buy a second house in just in case i need to make a fast exit. the minute interest rates went up by half a point or 1% when

they had been low for a long time, i went out and had a party. i knew my sales were going to go through the roof and they always did.

>> we're back with barbara corcoran. also joining us, henry cisneros, former hud secretary under president clinton. >> let's talk about housing. it has been said that owning a home is the american dream. henry: i i believe that. >> it has also been said that virginia a good investment in the long-term. let's start with the american dream. is owning a house still the american dream? henry: it is a american dream. even the mill lethal weapon yells late to a decision to own millennials -- still believe it is the goal to own a home. it is for the long haul, good economics. most americans, the sum total of

their net worth is the equity they have in their home. it is one of the instruments by which we move people into the middle class. we can't afford to give up our homeownership. people are buying later. careers are more mobile. people think they can't afford to sink down into a house because they may be in another city a year from now, but i think home ownership is still very important in the big picture. >> i have sat down with clients and we have walked them through the numbers showing them the low interest rates, the difference between buying and renting. now an show somebody right why it makes more sense to invest and buy a home yet they don't want to. henry: it has to do with the way amortizeation works. you look at a rental property. you could spend $750 a month to own a home. over a period of time as you pay those monthly coupons, you are buying into the equity of that

house. >> people still are conditioned. i think it has to do with the stock market correction in 2000, 2008. why is it that the rental economy has continued to boom? barbara: i think there is two reasons. one being that people's memory is their deficit. you don't forget when you injured deeply so quickly that you can get injured again. even if you didn't experience it yourself. what drives that decision is how people feel. someone has two kids, they want a house in a neighborhood with a good school or move out of the city to accommodate their lifestyle. it is more driven by your own needs and lifestyle. it is not so much economics. >> lifestyles have changed ecause people are waiting long er to marry. barbara: 40% of the population is single. >> what is the future of the

housing market then? henry: i think the housing market is strong because americans need a place to live. whether or not it is level, business to be in. for the long haul, we're going to need more rental. we have a vast deficit of affordable rentals. not just for people who are on the margins of poor but people who are firearm, policeman, teachers, nurses. the mainstream workforce. barbara: how do you create that? henry: it is going to take governmental involvement to create incentives to build housing for that working group. >> henry, before 2007, my mother and o idea what fannie mae freddie mac were. everybody knows those names now. what is the role of government as it relates to housing? henry: fundamentally, the role of government is to make sure we create the conditions where people can live in decent housing. we have so many people paying 50% of their income, one hole of heir monthly check, two-week

aversion, on just keeping shelter for their children. that is too much. they don't have money left for other things. so the government has a role in several ways. one as i mentioned a moment ago, we need to be spend manager on create rental availability because we spend a lot of on home ownership through mortgage deduction. that is an issue. with respect to homeownership, we need to have fannie mae and freddie mac in existence so that we have more capital so the taxpayer doesn't end up paying as we did in the last round. mortgage dary mechanism that allows liquidity is a piece of the government's responsibility. >> are you worried about another housing crisis? >> i think the odds are not that anything is on the horizon.

it never fully recovered. >> a lot of these mortgages are still underwater. they didn't get the benefit. to pay lower monthly mortgage. henry: the housing sector got so battered, a lot of people left the market. the infrastructure for building is not back. the workforce never came back. the housing markets never fully recovered and there hasn't been a recovery in the united states since the end of world war ii that the housing market didn't -- >> has it been masked by these high-end real estate prices henry: i think people across the country know we're not back. maybe not new york or san francisco, but across america. >> you have so many people that were there was an incentive created for them to take short-term adjustable rate mortgages. now rates are going to go up. obviously mortgage rates are going to go up. is this not going to create a

problem a year or two out where now all of a sudden, rates are up and people are paying as you said, we haven't fully recovered. henry: that is the problem that interest rates are going to create. barbara: you're saying that very few adjustable rate mortgages -- people took advantage of low interest rates and lobbed in those rates. >> there have been a lot safeguards. >> at that time there were no safeguards. so what is different now? henry: the banking regulations are different. you know, sarbanes-oxley has played a more ma chure role and dod frank is in place. the problem is the psychological impact that people will slow down the march toward housing. barbara: you know what actually

happens? the minute interest rates went up by half a point or 1% when they had been low, i knew i went out and had a party because i knew my sales were going to go through the roof. because thrs there was a deadline. short-term it is a boost to the housing market. >> i'm watching "wall street week." >> i'm watching week week. >> i watch "wall street week." >> i was on the old "wall street week." >> i'm pleased to be on the brand new "wall street week." >> i hope you are too. >> i'm sure you will too. >> "wall street week" is sponsored in part by cocaine industries.

coke industries. >> they are pouring $100 billion a year into our real estate markets. how is that impacting the average american? barbara: it doesn't impact the it impact ican but markets allo the u.s.

the second home markets. towns developed in the middle of the midwest or in california. vineyards opened up the chinese market developed vineyards so you can say i own a vineyard in california. it affects the luxury buyer but it doesn't affect the blue collar worker struggling with the mortgage trying to find a home. that is a different world. henry: i think in california, the l.a. area and san francisco you see some impact for average folks. >> so overall, the influence of foreign money in our economy is a good sign? first of all they are regarded as a safe haven in the world. they are bringing money here. that is a great thing. secondly, it just fuels the construction. >> should america be investing ? erseas

henry: of course. but there is a lot of worries about where to put money. you know the european economy is not as strong as it has been. you wouldn't go to a lot of emerging markets. the moment of crisis in the world with respect to security ing questions. so i can understand that americans don't want to take that sfrisk they have good opportunities here. barbara: there is a negative top foreign investment -- certainly i could address new york city. when you look at the top 10 pieces of residential real estate that are for sale now, just go off the top, they go frr $85 million to $74 million. the top 10. almost all except one is owned by someone foreign buying its. when you're going to bid on that townhouse owned by an argentinean outgoing seller you're bidding against five different guys or women from out of town. it is hurtful. >> it is not just at the top.

what i'm seeing now is once the pickings are take and the higher level rg those investors want to put their money in the united states. they are going to go lower and lower into the price ranges. you can imagine why a person in china would want to put their money in the united states. this is a moment of urban renaissance. it is not just new york and san francisco, but all over the country. the center city populations are solidified. populations in denver, dallas, atlanta. growing. this millenniel reality, young people who want to be near the urban stimulation is real. the empty nesters coming back into the city to live is real. what is at work in my opinion, manufacturing is gone. we suffered immensely as it died, but in its place is international trade, new media, biosciences and big medical

centers. higher education. big institutions. u.s. scrmbings the biggest employer in los angeles, for example. >> outside of things like to hamptons, or outside of san francisco, what you're saying is really negative to some of the suburbs in the middle of the country. negative. that is not our population is growing and there will always be a population. >> but for the first time home buyer. not getting access to that capital to absorb that inventory. henry: they are filling in this suburban places. >> where would you put your money, henry? >> henry: where i'm putting my settings. urban the company that i have chaired for the last 15 years, cityview

raises capital to invest in urban and we have done about 85 projects in 13 markets. barbara: commercial or residential? .enry: dreptsrble barbara: for purchase? henry: originally for purchase. as the economy went into the tank in 2008 and people were not buying, we switched mostly to multifamily and it has been very, very good. right now we have probably six or eight projects in the bay rea. our job is to produce for our investors which are institutional. you have to deliver for your investors. we have very good numbers. >> you have also invested in some municipal bonds. >> in recent years in the last year, i decided that i wanted the to go from the emphasis -- i'm a cities guy. i'm an urban guy. i was a mayor and a hud secretary. i decided i wanted to exand from

urban real estate to the next big opportunity, urban infrastructure. we have cities that have 100-year-old water systems and the water is not safe. we have city consist congestion and traffic. says that need electrical grid redone. we have cities that have broad questions for the future. fiber ok on ticks. i'm working my way into that business by investing in what is the largest minority owned municipal bond underwriting firm and bought into the firm with the view of not only doing bond business but expanding to really think capital to pressure the. which i think is going to be huge.

>> "wall street week" is sponsored in part by morgan stanley where capital creates change. >> what is the correlation between stock market and real estate value? barbara: when the stock market

real, the upper end of the estate market pops up immediately because people feel wealthy. they are getting year-end bonuses and they feel muscle and that go and buy that real estate. >> do you have a personal indicator of how the economy is doing? are there certain things you look at? barbara: i have indicators of how far my money is going. i'm concerned about that. for example, when i buy a fresh bouquet of flowers in the last three years, you used to get 12 roses and then eight and now six. that concerns me. when i ran my business, i used one indicator, i would counts the frames on the skyline. it never led me astray because the crane was the first indication that more inventory was being built. >> what about you? henry: i notice things like what is the crowd at sporting events?

at some places you can see a more elite crowd because they can afford the tickets and in other cities it is a diverse crowd and you say this is a city whose economy is working. >> i want to talk about the future. you're bullish on the housing market and the real estate? barbara: for the time being. inventory is down 10% against last year. last year, you saw 10 houses. now you see nine. that helps real estate. prices are up 6%. interest rates are still cheap. henry: i'm bullish about the future of the country, the city, the society we're building. >> what are you worried about? henry: the economy exfment keeping it strong enough. we have to keep our technology strong so that we have productivity, growth, innovation and research. keep our higher education and institution strong, but on the whole, this is still the place to be in the world. >> i'm going to end it on that. i want to thank barbara corcoran and henry cisneros for spending

time today with "wall street week." that is it today. you can check on us all week at wallstreetweek.com.