{"id":153987,"date":"2023-06-14T11:55:50","date_gmt":"2023-06-14T17:55:50","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=153987"},"modified":"2024-02-27T11:23:51","modified_gmt":"2024-02-27T18:23:51","slug":"corcoran-says-prices-will-go-through-the-roof","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/corcoran-says-prices-will-go-through-the-roof","title":{"rendered":"Barbara Corcoran, Unlike Elon Musk, Says Home Prices Will \u201cGo Through The Roof\u201d"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC5229052079\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Another famous name is weighing in on the housing market. A few weeks ago, it was&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/elon-musk-says-home-prices-will-drop\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Elon Musk<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;claiming that home values would plummet as commercial real estate faced headwinds. Now, it\u2019s <a href=\"https:\/\/www.youtube.com\/watch?v=P_v-O0t2NP4\" target=\"_blank\" rel=\"noreferrer noopener\">Barbara Corcoran<\/a>\u2014albeit a more experienced source when it comes to real estate\u2014touting the opposite.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The statements came in a recent interview Corcoran did with Fox Business\u2019s Liz Claman. \u201cThere\u2019s no relationship between the commercial and the residential,\u201d Corcoran told her. \u201cThe residential is starting to rebound, but the commercial is in trouble.\u201d<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">\u201cSo Elon\u2019s wrong?\u201d Claman asked.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">\u201cOf course he\u2019s wrong,\u201d Corcoran said. \u201cYet again.\u201d<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">An Interest Rate Bottleneck<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">According to Corcoran, what\u2019s keeping prices from rising much now is a \u201cbottleneck\u201d caused by higher mortgage rates, which now sit at 6.71%, according to Freddie Mac.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Average rates have climbed nearly 150 basis points in just the last year and over 400 since rates were at their lowest\u2014a mere 2.65% in early 2021.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1200\" height=\"630\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/06\/chart-1.jpg\" alt=\"U.S. Weekly Average Mortgage Rates (2020-2023) - Freddie Mac\" class=\"wp-image-153989\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/06\/chart-1.jpg 1200w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/06\/chart-1-300x158.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/06\/chart-1-1024x538.jpg 1024w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/06\/chart-1-768x403.jpg 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><figcaption class=\"wp-element-caption\"><em>U.S. Weekly Average Mortgage Rates (2020-2023) &#8211; <a href=\"https:\/\/www.freddiemac.com\/pmms\" target=\"_blank\" rel=\"noreferrer noopener\">Freddie Mac<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The rising rates have put what many in the industry call \u201cgolden handcuffs\u201d on today\u2019s homeowners, discouraging them from listing their homes and buying new ones. (That would require trading an ultra-low interest rate for today\u2019s much higher one). According to Redfin, about 85% of mortgage homeowners currently have a rate of 5% or lower.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">\u201cSellers don\u2019t want to move from their apartment or their home because they don\u2019t want to take on higher interest rates, and buyers are too afraid because they are getting less house. In fact, they\u2019re getting half the house they would have two years ago,\u201d Corcoran said. \u201cSo you\u2019ve got a standoff going on.\u201d<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Higher Home Prices Could Be Down the Pike<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Corcoran\u2019s right: Buyers have definitely pulled back since rates jumped. Applications to purchase a home are now 27% below last year\u2019s levels, according to the Mortgage Bankers Association, and home prices have stopped their steep upward climb as a result. The median sale price clocks in at $407,415, per Redfin\u2019s latest numbers, up from $382,000 in January but down 4% from a year ago.<\/span><\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"938\" height=\"714\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/06\/Screenshot-2023-06-14-at-1.33.23-PM.jpg\" alt=\"\" class=\"wp-image-153990\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/06\/Screenshot-2023-06-14-at-1.33.23-PM.jpg 938w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/06\/Screenshot-2023-06-14-at-1.33.23-PM-300x228.jpg 300w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/06\/Screenshot-2023-06-14-at-1.33.23-PM-768x585.jpg 768w\" sizes=\"auto, (max-width: 938px) 100vw, 938px\" \/><figcaption class=\"wp-element-caption\"><em>U.S. National Median Sales Price (2020-2023) &#8211; <a href=\"http:\/\/redfin.com\" target=\"_blank\" rel=\"noreferrer noopener\">Redfin<\/a><\/em><\/figcaption><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Things will change once rates turn a corner, though, Corcoran told Claman. \u201cThe minute those interest rates come down, all hell\u2019s going to break loose. Prices are going to go through the roof,\u201d she said.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Many industry players expect rates will indeed fall later this year. MBA predicts rates will drop to 5.6% by the end of 2023 and 4.8% by the close of 2024. Fannie Mae\u2019s latest forecast calls for 6% and 5.4% rates, respectively.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Those are just forecasts, but if they ring true, it could spur a jump in demand, which the housing market\u2019s ill-prepared to meet. Housing inventory is currently near all-time lows, and according to Realtor.com, the market\u2019s already 6.5 million short of demand. Lower interest rates would only add fuel to the fire.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">As Corcoran put it, \u201cIt\u2019s going to be a signal for everybody to come back out and buy like crazy. We could have COVID all over again.&#8221;<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_caab38e510169320091accf804a90d39\" class=\"visibility-group alignwide  hidden\">\n        \n\n<div id=\"hero-block_a495b98eaf98095f4b93c5a69282638e\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-1\/2 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-slate-800-color has-text-color has-large-font-size wp-block-paragraph\" style=\"font-style:normal;font-weight:800\">Find the Right Agent, Close the Best Deal<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color wp-block-paragraph\" style=\"font-size:18px\">Step #1: Use Agent Finder to match with top <em><strong>investor-friendly<\/strong><\/em> real estate agents to help you find, analyze, and close your next deal.<\/p>\n\n\n\n<div id=button-custom-event-block_648306fc7ef7fad128baedfdd7af7884 class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/agent\/match\" x-on:click=\"window.analytics.track(&#039;Blog Block | B2C Marketplace Agent Finder&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/corcoran-says-prices-will-go-through-the-roof&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Find an Agent<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/08\/Marketplace-Blog-Blocks-Agent-v3.png\" alt=\"investor friendly real estate agent\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color wp-block-paragraph\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a href=\"https:\/\/www.biggerpockets.com\/signup\" x-on:click=\"window.analytics.track(&#039;Blog Block | Acquisition | Free Membership Signup&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/corcoran-says-prices-will-go-through-the-roof&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Everybody&#8217;s got a different take on the housing market. This time, legendary investor, Barbara Corcoran, is weighing in.<\/p>\n","protected":false},"author":613679,"featured_media":153994,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7381,7119],"tags":[],"class_list":["post-153987","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing-prices","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/153987","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613679"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=153987"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/153987\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/153994"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=153987"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=153987"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=153987"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}