"They never stabilize": When Shark Tank investor Barbara Corcoran discussed the unpredictability of the real estate market

In a March 29, 2023 interview with Good Morning America, Barbara Corcoran, an investor on Shark Tank and founder of The Corcoran Group, discussed the unpredictable nature of the real estate market. She explained:

"They never stabilize. Prices are either going up or they're going down. You got to buy somewhere."

Corcoran's insights into the current housing landscape emphasized the challenges and opportunities buyers face, particularly with fluctuating interest rates and regional price differences.

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Shark Tank star Barbara Corcoran discusses the ever-changing nature of the real estate market

Rising interest rates and the impact on buyers

During the interview, Barbara Corcoran addressed the effects of higher interest rates on the real estate market. She pointed out that although there was talk about the market cooling down, the reality remained different for many buyers. She stated:

"The problem in the marketplace is the higher interest rates have pushed so many buyers to the sidelines,"

Despite the higher rates, Corcoran emphasized that the competition in the market remained intense. The Shark Tank investor explained:

"You go to any open house on any Sunday, you see 40 cars standing out loud outside the house and if you put in a bid on the house half the time you're going to lose it."

This suggests that while some buyers might be sidelined, the market itself continued to exhibit strong demand, making it challenging for many to secure properties.

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Regional variations in real estate prices

Corcoran also discussed the price differences between regions of the United States. She explained that in recent years, the real estate market in the western U.S. has experienced significant price increases. She explained:

"For the last 10 years prices in the western part of the United States has outpaced the East."

In contrast, the eastern U.S. has seen relatively more stable pricing, with houses remaining more affordable. The Shark Tank investor noted:

"In the East houses are still more affordable so they have more room to grow."

This variation in pricing between the two coasts creates distinct dynamics for buyers in different regions and influences the broader national market's behavior.

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Navigating real estate investments and renovations

In real estate investments, Corcoran offered tangible tips on how to evaluate the potential of homes for rental and renovation purposes. She suggested that potential investors compared rents for renovated and unrenovated units within their local market. The Shark Tank investor stated:

"The smartest thing to do is compare what the apartments in your area are renting for renovated and unrenovated."

This comparison helps determine whether the cost of renovation is justified by the expected returns. Additionally, Corcoran highlighted a key challenge in real estate renovations, which is cost overruns. She explained:

"Renovations always cost 30% more than you anticipate."

Her insights aim to enable investors to make better-informed choices when deciding whether to upcycle a property for rental or not. Corcoran also spoke about the widespread false impression by buyers regarding home refinancing when interest rates drop.

The Shark Tank investor also explained that hoping rates to decrease and refinancing to be cheaper can be hazardous. Corcoran cautioned buyers against the possibility of waiting for the rates to go lower in the future. She reinforced that interest rates could increase as well as decrease, cautioning buyers to think about the long-term affordability of their home purchases.

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