Real estate expert Kirsten Jordan has warned that house prices in some areas could fall by up to 10 per cent this year.
Jordan, who was the first broker to be chosen for Bravo’s Million Dollar Listing New York, said some overvalued markets are due a “correction.”
“This is the opportunity for buyers to enter the market,” the luxury real estate agent said during a fox business interview.
It comes as Redfin CEO Glenn Kelman said home prices will fall this summer as homeowners trying to wait out high mortgage rates realize they can’t wait any longer.
Home prices in former boom towns are already starting to fall as inventories rise and competition for individual homes wanes.
“This is the opportunity for buyers to enter the market,” the luxury real estate agent said during an interview with Fox Business.
“I really think we’re going to see a slight correction in home prices,” Jordan said. “This is the opportunity for buyers to enter the market.”
He said the area where prices remain very high are major U.S. locations where inventory has always been lower.
“Luxury hotspots will remain quite strong,” he said.
But it’s the parts of the country that saw “inflated demand that came from really cheap money” when interest rates were low during the pandemic that people should pay attention to.
“What we’re going to see is that there’s lagging data on what’s happening in parts of the country that had actually artificially doubled home prices in areas where we don’t know where that demand actually came from,” Jordan explained. .
‘These were people who moved across the country during a time when they could work remotely and had access to a lot of cheap money. “I think that’s where we’ll see this delayed correction coming over the next few quarters.”
Jordan predicted prices could fall by as much as 5 to 10 percent in some places.
But he opposed any fear of a serious housing crisis like that of 2007 and 2008.
‘We definitely hope that’s not the case. At this point, it remains to be seen because the last time we had a decade of very, very low rates was a time when people also bought maybe a nice coat, and had two nice pairs of shoes, and maybe they opened your refrigerator. and they only had a little food there because they didn’t consume too much,” he added.
He noted that Americans now find themselves in a situation where they expect “cheap money” and overspend and consume.
He said it’s hard to predict what might happen to the market because it’s so immersed in everything else now, including credit card debt.
While he said he thinks higher mortgage rates will be around for a little while longer, he doesn’t think we’ll see “20 years of double-digit interest rates like we saw in the 1970s and 1980s.”
The average 30-year fixed-rate mortgage currently sits at 6.99 percent, according to the latest data from government-backed lender Freddie Mac.
It comes as Redfin’s CEO said in an interview earlier this month that there are signs the housing market is starting to become more affordable in certain areas.
Homes in major metropolitan areas in states such as Florida in Texas are already experiencing “significant price cuts,” Kelman said in an interview with financial expert David Lin.
The real estate company’s boss said the reason prices are falling is because homeowners are giving up waiting for mortgage rates to drop before selling.
Tampa is among the coolest home markets on Florida’s west coast, according to Redfin
As more people decide to put their homes on the market, inventory grows, which begins to drive prices down, he said.
New data from the brokerage earlier this month found that housing markets on Florida’s west coast are cooling faster than anywhere else in the United States.
New construction is skyrocketing, bringing the number of listings to pre-pandemic levels, meaning there is less competition for each home.
In addition, rising insurance costs and a sharp increase in natural disasters are deterring people from settling in the area.
A cooling housing market typically occurs when there are more sellers than buyers. Prices fall and homes are selling slowly – and below asking price – while inventory levels rise.
The opposite happened in Florida during the pandemic, when it became one of the most popular markets in the United States, but now there appears to be a reversal. It gives hope to those who want to buy, but it is a hard blow to those who bought in recent years.
North Port’s housing market is cooling the fastest, followed by Tampa and Cape Coral, the analysis found.