Self-made real estate millionaire and Shark Tank star Barbara Corcoran predicted when home prices would rise, how much she expects them to rise, and more.
Things are changing
Speaking to Fox Business’ “Cavuto: Coast to Coast,” Corcoran explained there is a standoff between buyers and sellers. But as soon as interest rates drop, things will change dramatically.
Decrease in interest rates
The real estate mogul explained that prices will reach new heights once interest rates go down. Corcoran predicted that this would signal everyone to buy, and house prices would go up by 20 percent. The Shark Tank star warned that it would be a COVID-19 market all over again.
Home prices across the States
Despite the annual decline, the first in 11 years, home prices have not dropped equally. Corcoran shared that coastal areas offer lower prices since the houses are already not affordable. But she added that home prices are increasing in other regions like the Southwest.
The hottest markets
One of the hottest marketers is in South Florida, Corcoran told Fox and reminded that prices are increasing in this area. Though she is not a fan of Florida, she understands that people love it there, so they are willing to pay any price.
No repeat of 2008
Corcoran said we will not see the housing market collapse like in 2008. She cannot compare the 2008 situation to the current situation, but she advised people to buy now instead of regretting it later. During an ABC News interview in December, Corcoran noted that potential buyers must find a good broker because things will not get more affordable.
The magic number
The self-made millionaire revealed she wouldn’t be surprised if the real estate market went up to 8-10% once interest rates come down one point. The average 30-year fixed mortgage rate is 6.91%, but once mortgage rates dip to 6%, sidelined buyers will come rushing into the housing market, Corcoran predicted.
Shortage of houses
Corcoran said the market is not seeing changes at the moment because people are stalling due to indecision. However, a shortage of houses will be another factor pushing the market forward.
Sellers are making the most of it
The Shark Tank star told Neil Cavuto that getting pre-approved for your mortgage signals you’re a serious buyer. She added that the shortage of homes is one of the factors that will prevent the prices from going down. Even if sellers pay a smaller commission, they still want to get the most out of the sale.
Americans are waiting
One survey published on Realtor.com revealed the vast majority, or 72%, are waiting for a mortgage rate of 5 percent to buy a home. The survey of 5000 people was conducted in November 2023. However, according to Corcoran’s predictions, this is a good move.
Renting instead of buying
While renting is not affordable, some experts predicted that it might soon become a preferable option to buying a home. Ryan noted that renting will be a more cost-effective option in 2025 and 2026.
Upward trend
Additionally, Capital Economics doesn’t see mortgage rates falling below 6% by the end of 2026. At the same time, it expects home prices to continue their upward trend while rents stay the same.
JPMorgan is more optimistic
JPMorgan Asset Management shared that housing market recovery will be gradual since it was hit the hardest when the Fed began raising rates. Many agreed with this assessment since it will take years for supply to catch up with demand. However, JPMorgan strategists noted that a growing number of mortgage-locked homes are going up for sale.
