Houses for sale will be ‘gobbled up’: Barbara Corcoran
According to Barbara Corcoran, host of ABC's Shark Tank and founder of the Corcoran Group, a New York City-based real estate brokerage firm, homebuyers will “devour” homes for sale this summer.
Before the corona virus pandemic, the United States did not have enough homes for sale to meet demand. With sellers slower than ever to enter the market due to nationwide closures and higher demand, the United States has become an even more competitive market, Corcoran said.
"If shoppers come out in many of the restricted states and are actually allowed to view homes, they will do a lot of shopping very quickly." Even in countries where you have excess inventory, it will be devoured, ”Corcoran told Yahoo Finance.
In the week ending June 13, inventories declined 27% year over year, according to Realtor.com. Inventories reached a 25-year low in December 2019 with a moderate improvement in early 2020. However, they fell when the pandemic hit the US in mid-March and sellers pulled their homes off the market after an analysis by Odeta Kushi. Deputy Chief Economist at First American Financial Corporation, a Washington, DC-based real estate service provider.
FILE - In this file photo dated February 26, 2020, visitors can see the "Painted Ladies", a series of historic Victorian houses, in front of the San Francisco skyline from Alamo Square Park in San Francisco. An estimate released by the California Treasury on Friday May 1, 2020 said more people were leaving California than moving in. This is a testament to the toll that the state's real estate crisis, as the fifth largest economy in the world, is taking towards 40 million people. (AP photo / Jeff Chiu, file)
The corona virus forced Americans to work from home and redefined how Americans view their homes. Some Americans are now looking for new homes with larger courtyards, home offices, and more space after spending months in lockdown. Studies also show that, according to Redfin, more shoppers are now looking for their next home in the suburbs.
"Everyone has reevaluated the concept of home, and what comes out of it is a desire for change. And if you change, you have an increasing real estate market," said Corcoran.
In addition, mortgage rates hit an all-time low this week, bringing even more buyers to the market. Mortgage applications reached an 11-year high in the week ending June 12, according to the Mortgage Bankers Association.
"[There are] giveaway prices on the mortgage market where money is so cheap that it's almost as if you are embarrassed to say that you have no mortgage. There are so many incentives there," said Corcoran, who noted that tightened credit restrictions are the only negative.
"Explosion of prices"
If more people want a product than the market can deliver, the price increases. Real estate prices rose to an all-time high before the pandemic, when US real estate was sold for an average of $ 384,900 in the first quarter of 2020 - well above the pre-Great Recession peak, which peaked at an average of $ 322,100 to the Federal Reserve of St. Louis.
Given the increasing demand, houses in the US could become even more expensive this summer, according to economists.
"I think you will really experience a price explosion," said Corcoran. "Prices will continue to rise, if buyers come out in many of the restricted countries and are actually allowed to view houses, they will be able to do a lot of shopping very quickly."
Sarah Paynter is a reporter for Yahoo Finance. Follow her on Twitter @sarahapaynter
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