Times are tough in the U.S. housing market, as home sales and values are declining and foreclosures are going up.
Donald Trump, who boasts developments from Panama to Phoenix, from the Middle East to Midtown Manhattan, admits that away from the sparkling oasis of Manhattan, times are hard.
"The real estate market throughout the United States is a basic disaster," Trump said. "But Manhattan is unbelievably strong. It's probably as strong as I've seen it. I sold an apartment recently for $34 million. I have another apartment for $45 million that I suspect will sell pretty easily. It's been an amazing market in Manhattan. Outside of Manhattan, it's a basic disaster."
The Department of Housing announced today that new-home sales declined 2.8 percent in January, and RealtyTrac estimates there will be more than 600,000 foreclosures across the United States in 2008. So what does "the Trumpster" recommend?
"The biggest problem that I see in this country is that the bank will send, from a computer, a notice of default to a homeowner. And they'll say, 'Please leave the house in 10 days' and the homeowner doesn't know any differently. And they'll pack up their belongings from a house that they've lived in for 20 years and leave and they have no place to go. And it's a travesty."
What should the homeowner do instead? Call up the bank and negotiate, Trump says.
"If the bank is nice, they'll give them an extension, they'll give them lower interest, they'll cut something off the mortgage — they'll make it so it works," he said. "And if the bank is smart, they'll do that. If the bank isn't nice, fight the bank. Fight till the death."
Trump explained that, "the last thing the bank wants is a house."
Trump's advice is worth heeding, if only because he's been in real estate for a long time. His father, Fred Trump, began buying small rental properties in the 1950s around the family home in Queens and in Brooklyn.
"My father really worked hard, he was a really good negotiator," Trump said. "He was a really good builder. In other words, he knew how to build an apartment house ahead of schedule, ahead of budget, or a house in Brooklyn. If he built a house, he would come in under budget and ahead of schedule."
Armed with the example, even burden, of his hardworking father, Trump embarked upon his first major project during the property recession of the 1970s.
"I took over the old Commodore Hotel, which was pretty scary because the market was terrible," Trump said. "As I get older, I do become a little bit more conservative in a financial sense." At the same time, he also says he's gotten more confident.
"You do develop a confidence, sort of like golf. If you sink the first putt, and if you keep sinking a couple of more putts and as the round goes on, you just feel confident. It's that way in life. If you sink the putt, you get more and more confident. And very few people have sunk more putts than I have."
In 30 years he says his company has completed more than $200 billion worth of business worldwide. The sign of Trump's confidence is emblazoned across every one of his buildings.