At GOBankingRates, we recently wrote about Barbara Corcoran’s prediction that housing prices “are going to go through the roof.” She had said during a Fox Business Interview that while we are currently experiencing a bottleneck, it won’t last forever and home prices will rise as soon as mortgage rates drop.
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We asked real estate experts from across the country to comment on these predictions and provide some insight into what they expect from the housing market in the coming year. Here’s what they had to say.
What Predictions Did Barbara Corcoran Make?
Often referred to as the Queen of New York Real Estate, Barbara Corcoran has made a fortune in the industry. The real estate mogul earned the title after building the largest residential realty in the Big Apple.
The founder of the Corcoran Group now stars in and executive produces ABC’s hit TV show Shark Tank and is known for her no-nonsense advice and savvy investments. She’s regularly tapped to give insight into the real estate market and has an enviable track record of being dead on with her predictions.
Barbara was recently interviewed on Fox Business about her opinion on the real estate market. During the interview, she noted there is no relationship between the commercial market, which is in a downturn, and the residential market, which she sees rebounding.
Corcoran expects that the minute interest rates come down, “all hell is going to break loose, and prices are going to go through the roof.” She predicts that housing prices could go up by 20% once the rate is lowered.
She explains, however, that this may vary significantly by region — particularly given the high prices in coastal areas over the past few years.
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Is Barbara Corcoran Right?
Andreis Bergeron, founding member of Awning.com, an Airbnb management company, said “Barbara Corcoran’s insights into the real estate market are always worth considering, given her extensive background and success in the industry.
“She suggests that housing prices will skyrocket,” he continued, “which is a possibility supported by current low inventory levels and high demand in many areas. However, real estate markets are profoundly local, and such predictions can vary significantly by region and city.”
Why the Market May Vary by Region
Bergeron added, “In some of the markets where Awning.com manages properties, we’ve noticed that while central urban areas are experiencing a plateau in prices, suburban regions are seeing a surge, possibly driven by the ongoing remote work trend. Anecdotal evidence from our operations supports the idea that certain less-dense areas might indeed see the kind of growth Ms. Corcoran predicts.
“Moreover, from a data-driven perspective, our analysis often reveals patterns not immediately obvious without deep dives into specific metrics such as rental yields, occupancy rates and local economic growth indicators,” he explained. “These insights are crucial for understanding the nuanced ways in which the macro predictions might play out in specific locales.”
Why Corcoran’s Advice Is ‘Spot On’
Brett Johnson, owner of New Era Home Buyers, said, “When interest rates drop it typically spurs an increase in housing demand. Lower rates make mortgages more affordable, attracting buyers to enter the market.”
The Colorado real estate investor and licensed agent explained, “Throughout my career, I have noticed that even a slight decrease in interest rates can spark a surge in home purchases. Buyers who were hesitant before suddenly find themselves with purchasing power leading to heightened competition and driving prices up.”
He added, “Additionally, in Colorado’s real estate scene, where demand frequently surpasses supply, any decline in interest rates can amplify bidding wars pushing prices higher.”
“Nevertheless,” he said, “it is important to recognize that while lower interest rates can push prices up, they do not always ensure growth. Market conditions, economic factors and local dynamics all play roles. Therefore, while I agree with Barbara Corcoran’s viewpoint, thorough analysis and understanding of the market are crucial for both investors and homebuyers.”
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This article originally appeared on GOBankingRates.com: Is Barbara Corcoran Right About the Housing Market?
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