Barbara Corcoran: Homebuyers Can’t Afford To Wait
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“I don’t think it’s wise to wait,” Corcoran told CNN presenter and chief business correspondent Christine Romans on Thursday. “Of course, if you can’t find a home, you have to wait. But to be part of your plan to wait for house prices to drop, I don’t envision that happening in the next few years, at least. not for next year. “
But waiting could cost you more, Corcoran said.
Inevitably, the boiling real estate market drew comparisons with the real estate bubble of 2006. But Corcoran does not think it is a bubble, as the high prices are not artificially supported by shady loans practice how subprime loans led to foreclosures in the last housing crisis and there aren’t many pinball machines out there.
“We don’t really have a bubble, what we have is a usual market that’s just gone crazy based on the individual demand of people who want to live there,” she said. “I have never seen a housing market like this. I have spent almost 50 years in the real estate industry. I have never seen prices rise at this rate nationwide.”
The reason for the price hike, she said, is an imbalanced market, with overwhelming demand and historically low inventories. “You don’t have enough houses to go around.”
“Mortgages are going up,” she said. “You could wait until next year, but you will definitely pay more, in my opinion. And you will pay more. [to borrow] your money. Your expenses will really increase. “
Corcoran also advised against trying to wait until the market ends in a rental while saving to buy a home at a more affordable time in the future.
“There is no safe haven where you can go and feel like you can wait a while,” she said. “Your landlord is raising the rents, the concessions are all gone on the rental front. All you’re going to do is wish you bought yesterday.”
Being a buyer in this market
Still, it is a treacherous market for homebuyers, Corcoran said.
She pointed to the speed with which buyers have to bid on homes that contract within days, the inspections that are often canceled to be competitive, and the high bids – sometimes all in cash – required to beat the competition.
“But if you’re in the home buying market and you’ve lost three homes, an unusual emotional thing is happening to buyers,” she said. “They go crazy! They jump into the house next door and finally everyone settles down.”
But she warned to settle down too much or too quickly.
Corcoran has advised buyers to think about what a home they are desperate to grab now in a few years after the market calms will look like.
“Ask yourself how this house is going to perform in a normal market,” she said. “It’s always, always in a normal market, about location, location, location. Focus on the best location and the smallest house.”
Being a seller in this market
For sellers in today’s real estate market, she said, things are decidedly easier.
“The seller doesn’t need any advice,” she said. “They just overvalue their home, hang on and see what happens. Nobody feels bad for sellers.”
Corcoran said many sellers put their homes on the market thinking those days will never return, but she believes the time is on their side.
“I think if they wait another year, they’ll get even more,” she said.
The essential thing that a seller must remember now is that they will quickly become a buyer and find that they may not be able to get what they want.
“You could make a big hit selling the house, but you’re going to be in the worst market trying to buy one,” she said. “Moving to a new house first is absolutely the right dance step, because you will have no problem getting rid of your old house.”
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