"I worry about it all the time"—When Shark Tank investor Barbara Corcoran addressed the affordability crisis in housing and rising competition

Barbara Corcoran, founder of The Corcoran Group and Shark Tank investor, once discussed her concerns regarding the real estate sector. In an interview with Bloomberg on August 14, 2024, Corcoran talked about the housing market and said the prices for starter homes are "crazy."

While responding to a question about housing affordability crisis, she said:

"I worry about it all the time on two fronts."

Notably, she emphasized on growing rent rates which pose difficulty for individuals to purchase first homes. She added that increased competition in the property market also tests potential buyers' capacity for affordability and security.

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Shark Tank Barbara Corcoran's insights on rising housing costs and the challenges faced by first-time homebuyers

Rent prices continue to increase across the United States

During the interview, Barbara Corcoran discussed the impact of rising rents on individuals across the country. Bloomberg asked her about housing affordability in America, to which she responded:

"Rents keep going up anywhere in the United States, and that's a real concern because people can afford the rents based on their income."

She added that the gap between rent prices and household income is a significant issue for many Americans, particularly in major cities where rental demand is constantly high. Corcoran also underscored the broader effects of this issue, noting that it isn't just about affordability but about the strain on renters' finances. The Shark Tank investor noted:

"That's a real concern because people can afford the rents based on their income."

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The struggles of first-time homebuyers

The Shark Tank star expressed particular concern over the challenges faced by first-time homebuyers. She stated:

"I also worry much more so about people getting their piece of the American dream, buying their first house, because the first house market, the starting house market is the hardest hit where the greatest bidding is going on."

Corcoran shed light on how the competitive bidding environment has made it difficult for many to secure affordable homes. She illustrated this point with an example from a friend’s daughter, who was recently involved in a bidding war for a property in New York. The Shark Tank investor explained:

"I even had the daughter of a friend of mine tell me that last week, she was competing against her two best friends in the New York market."

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Adapting to changing interest rates

Additionally, Barbara Corcoran advised entrepreneurs not to worry about high interest rates as it is not productive. The Shark Tank investor explained:

"It's really a waste of time to spend a minute worrying about it. The only thing that counts in growing a business is what can you do about it?"

Corcoran reflected on her belief that business success relies on adaptability rather than focusing on external factors beyond one's control, such as interest rates. She also recalled a time when interest rates were as high as 18%, a scenario that caused widespread fear in the real estate market. However, the Shark Tank investor noted:

"They took advantage. They got 30% discounts on the market rate of a year before."

She added that during times of uncertainty, the "super-rich" were able to capitalize on opportunities while others hesitated. This experience led Corcoran to change the direction of her own business.

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