Market Trends August 28, 2023

Barbara Corcoran’s Take on the Current Real Estate Market

Thinking about buying a home can be tough right now. Some people want to wait for lower interest rates, but here’s the problem – if you wait too long, home prices might go up. That’s where Barbara Corcoran, a real estate expert and “Shark Tank” star, comes in. She recently shared her thoughts on what’s coming up in the housing market.

What Barbara Corcoran Thinks: What You Need to Know

The housing market is facing a tricky situation, which Corcoran calls a “bottleneck.” This means sellers are worried about higher interest rates, so they’re not moving. On the other side, buyers are being careful because they think they’re not getting enough value for their money. “Sellers don’t want to move from their apartment or their home because they don’t want to take on higher interest rates,” she said, “and buyers are too afraid [to buy] because they are getting less house [for the price]. So you’ve got a standoff going on. But things are changing.”

Corcoran believes there will be a major swing in the real estate market as soon as interest rates drop.

“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. “[Right now sellers are] staying put. But they’re not going to stay put if interest rates go down 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%,” she said. “We could have COVID [market] all over again.”

Different Places, Different Prices

Corcoran also talks about how home prices are changing in different parts of the country. A recent report said that home prices dropped for the first time in 11 years. But it’s not the same everywhere. In places near the coast, prices are going down because homes are really expensive. But in the Southwest, prices are actually going up. Some cities there saw prices go up by a lot – around 20% – in just half a year. Then there’s South Florida, where prices are still going up. Corcoran says this is because people really like Florida and are willing to pay more.

No Big Crash Coming

Corcoran is pretty sure that we won’t have a big crash like we did in 2008. Back then, things went bad because of problems with mortgages. But this time, people are being smarter with their money and not borrowing too much. So, even though the market might be uncertain, Corcoran doesn’t think it’ll be as bad as before. “People [have] their hard-earned cash in the market — people aren’t overleveraged,” she said. “There’s really no comparison to now compared to what came before.”

Homes vs. Businesses

Corcoran also looks at homes and commercial buildings (like offices) as two separate things. She says that just because one is doing well doesn’t mean the other is. Right now, homes are doing okay, but commercial spaces are struggling. Many people don’t want to buy commercial properties because they’re not sure if they’ll make money. This might take a long time to get better.

Bold Prediction: Home Prices Going Up

Corcoran stands by her idea that home prices won’t go down. She even thinks they could go up by 15% when interest rates on loans go down. She’s feeling positive because there aren’t many homes for sale, loan rates are low, and lots of people want to buy.

As things keep changing in the real estate world, Barbara Corcoran’s ideas can help both buyers and sellers. Her experience helps us understand how the market works and what we can expect.