Housing Prices to Go Through the Roof, According to Barbara Cocoran

• Author: Bobby Kub
• Posted: 2024-03-12

Barbara Cocoran, “Shark Tank” star and real estate entrepreneur, believes prospective homebuyers are likely to find themselves in a tough spot if planning to buy a home. Most potential homebuyers are entertaining the idea of the interest rates dropping before they can invest in homes without spending an arm and a leg. However, according to Cocoran, if you are a potential homebuyer and wait too long, you could find your plans hindered by a home price surge. Cocoran was in an interview with Fox Business when she shared her thoughts on when she expects home prices to rise as well as how much she expects them to increase by, among other things.

 

When Interest Rates Go Down, Home Prices Will Go Up

Cocoran says there is a “bottleneck” in the real estate market at the moment. However, she is keen to point out that it will not last forever. The bottleneck is due to the fact that home sellers do not want to move away from their homes or apartments because they do not want to deal with higher interest rates. Buyers, on the other hand, are afraid to invest in homes because they believe they will not be getting real value for their money. This has led to a standoff, but Cocoran is confident that things are changing.

She believes as soon as interest rates drop, the real estate market will experience a massive swing, and the prices “will go through the roof”. That is because while home sellers may stay put at the moment, this will not be the case when interest rates drop by a couple of points. Home sellers seem to be using this as a signal that immediately home prices go down, people are going to come out and buy, which, in turn, will make the home prices shoot up by 20%. Cocoran states all these may lead to a recurrence of the COVID market.

 

Home Prices and Market Trends to Keep Varying Geographically

A report released recently showed that home prices experienced their first annual decline in over a decade. However, Cocoran notes that this is not the case throughout the U.S. She goes further to point out that while prices in the coastal areas are going down due to houses not being so affordable, the story is totally different in the southwest, where prices are going up. To put exact figures to it, some cities have prices rebounding by 20% in half a year.

South Florida is another area in the U.S. where prices are expected to keep rising, and this has made it one of the hottest markets. Most people love Florida and appear to be willing to pay anything to own a home here.

 

A Major Housing Market Crash Will Not Happen Anytime Soon

The real estate market is quite precarious but, according to Cocoran, there will be no catastrophic housing market collapse like the one seen in 2008. That is because people are not overleveraged; hence, the situation now cannot be compared to what happened in 2008.

 

The Recovery Process of the Commercial Real Estate Market Will Be Very Slow

According to Cocoran, residential and commercial real estate markets are separate entities, which means if one recovers, the other may or may not recover. This is the situation expected with the commercial real estate market, which seems to have a long way rebounding. Some real estate experts have even questioned whether the commercial real estate market will ever recover.

The result of this uncertainty is a lack of confidence in the sense that people do not want to buy commercial real estate at the moment. No one has the confidence to determine whether the commercial real estate market will ever turn a corner and become as lucrative as it used to be. According to Cocoran, 50% of their best offices in midtown Manhattan are occupied and in most major cities as well as secondary cities, the vacancy rate is around 20%.

As of now, no one is brave enough to dive into the commercial real estate market, and the situation is expected to stay like this for a while. Cocoran says she thinks before this gets better, there is going to be a bit of a “bloodbath”.



In summary, Cocoran’s interview on when housing prices are expected to go through the roof urges prospective homebuyers to be on the lookout. That is because everyone is waiting for the interest rates to drop before they can invest in real estate. But again, when you have so many Americans buying, the prices of homes will skyrocket. Having said that, the best strategy if you want to buy a home is to ensure you are on standby.