“Shark Tank” TV star Barbara Corcoran, the Queen of Real Estate, provided valuable insights into the state of the housing market in a recent interview with Fox Business. For prospective homebuyers, the situation appears to be challenging. While some may be waiting for interest rates to drop before making a move, delaying too long could result in facing skyrocketing home prices.
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According to Corcoran, the real estate market is experiencing a “bottleneck” as sellers are reluctant to move from their existing homes because of fears of taking on higher interest rates.
On the other hand, buyers are apprehensive about the diminishing size and value of houses they can afford on their budgets. She pointed out that buyers are getting half the house they would have two years ago. This standoff between sellers and buyers is contributing to the current situation. But Corcoran emphasizes that this scenario isn’t going to last forever.
The key factor that Corcoran predicts will cause a major swing in the real estate market is a drop in interest rates.
“The minute those interest rates come down, all hell’s going to break loose, and the prices are going to go through the roof,” she said. Sellers are staying put because of the interest rates but they’re not going to stay put if rates decrease by two points.
“It’s going to be a signal for everybody to come back out and buy like crazy, and the house prices [will likely] go up by 20%. We could have COVID [market] all over again,” she said.
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According to The Wall Street Journal, a recent report indicated the first annual decline in home prices in 11 years. Corcoran notes that this is not the case everywhere in the United States. In coastal areas, where houses are notoriously unaffordable, prices have started to decrease. But in the Southwest, Corcoran states some cities have witnessed a rapid rebound, with prices increasing by up to 20% within six months.
South Florida stands out as another region where home prices are expected to continue rising. According to Corcoran, it remains one of the hottest markets in the country, driven by strong demand from people who are willing to pay a premium to live in the popular location. Despite not personally understanding the allure of the area, Corcoran acknowledges its success in attracting buyers.
For prospective homebuyers, the decision to wait for lower interest rates comes with the risk of having to face surging home prices.
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