Barbara Corcoran Warns Waiting Too Long To Buy A House Could Cost You 20% More
Waiting for interest rates to drop before buying a house could backfire if you wait too long.
Real estate entrepreneur and "Shark Tank" star Barbara Corcoran said the market will experience a major shift as soon as 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," Corcoran told Fox Business. "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."
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But for now, people are staying put and creating a "bottleneck" in the market because homeowners don't want to take on the higher interest rates they'd have to pay if they take out a new loan to buy a house.
Because of high interest rates, buyers are getting half the house they would get for the money two years ago.
"And buyers are too afraid [to buy] because they are getting less house [for the price]," she said. "So you've got a standoff going on. But things are changing."
Corcoran doesn't predict a major housing market crash like the one that happened in 2008 because people have cash in the market and aren't overleveraged. She also noted that while home prices nationally experienced their annual decline in 11 years, that's not the case in every market. In South Florida, one of the nation's hottest housing markets, prices continue to rise, but they're dropping in the coastal markets.
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"In the coastal areas, prices are going down because houses are just so not affordable," she said. "But if you look in the Southwest, prices are going up. You have some cities where prices are rebounding by 20% in six months."
Commercial real estate is a different story than the housing market, and Corcoran said she thinks it will be a long time before it rebounds because people have not returned to the office.
"Our best offices in midtown Manhattan are 50% occupied, and in most major cities, and even secondary cities, we have a 20% vacancy rate," she said. "No one wants to take that chance. I think it's going to be a bit of a bloodbath before it gets better."
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