While interest rates seemed to have driven a lot of sales activity or lack thereof, Shark Tank star Barbara Corcoran cautions prospective buyers that they could very well risk dealing with significantly higher home prices. Her reasoning is that as soon as interest rates drop, buyer demand will increase and home prices could surge as high as 20 percent.
As I mentioned last week, a large portion of home sales in New York are cash buyers, so high interest rates may not be as critical a factor in the decision-making process for some buyers. Yet for those prospective buyers who are holding out for interest rates to drop, they may likely have to deal with higher asking prices.
In an interview with Fox Business, Barbara said “Sellers don’t want to move from their apartment or their home because they don’t want to take on higher interest rates, and buyers are too afraid [to buy] because they are getting less house [for the price]. So you’ve got a standoff going on. But things are changing.”
A couple weeks back I stated the median asking price increased by 7.6 percent from the previous year. Although this has no correlation to the mortgage rates reasoning above but instead is a result of low inventory, it’s just another indicator worth paying attention to in the housing market. If you’ve been considering buying but are holding off for one reason or another, please reach out so I can address your concerns and help you weigh all your options. I am happy to jump on a call with no obligation to commit to working with me.