Real estate investor and “Shark Tank” star Barbara Corcoran has warned that that lower interest rates will results in home prices going “through the roof.”
In an interview with Yahoo Finance, Corcoran opined that lower rates would bring more buyers into a housing market where demand still outpaces supply.
“If interest rates come down another point by year end, everybody and their mother and their in-laws are going to look for a new house, and the competition’s going to be so fierce that house prices will have to go up,” Corcoran said. “There is such a shortage of houses right now, so prices have gone up despite everybody singing the blues. It happened simply because there are a lot of buyers and not enough houses available.”
Corcoran advised prospective buyers to get off the sidelines and start looking for properties “right now” rather than waiting for lower rates.
“Run into a community, see which houses you like and leave love notes on every door,” said Corcoran, adding this can be done even if the house is not listed for sale. “It works. The last four houses I bought were not on the market. I just picked out the house I like best and eventually the people called.”
Photo: Linkedin Editors / Flickr Creative Commons
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Just because a person is on tv doesn’t make them smart. Mortgage Payment have two components: sales price and rates. Lower rates resulting in higher sales prices will not stimulate buying.
A $700K home at 6.5% or a $800K at 5.5% still means buyers must be able to make payments.
High demand. Minimal product. Prices go up. Economics 101. Regardless of interest rate.
There’s no inventory people.
Lower rates will mean more sellers will be willing to finally move on, enter the market and give up their super low current mortgages. More inventory will mean stable or reducing prices. Its simple supply and demand.