Barbara Corcoran reveals when housing prices ‘will go through the roof’

Fox Business

27 Mar 202410:54

Summary

TLDRThe transcript discusses the current state of the real estate market, highlighting that commissions are negotiable and have always been so. It emphasizes the importance of transparent communication between buyers and brokers. The conversation touches on the rising costs of selling homes and the impact of interest rates on the market. The guest speaker shares insights on the resilience of high-end property sales and the potential for real estate prices to increase further. The discussion also covers the attraction of New York City and other markets, the challenges of starting in real estate, and the value of intelligence and sales skills in the industry.

Takeaways

📜 The conversation revolves around the current state and future predictions of the real estate market, with a focus on commissions, market trends, and the impact of external factors.
💬 Commissions in real estate have always been negotiable and this fact has not changed despite the confusion surrounding the topic.
📝 There is now more transparency as brokers are required to provide everything in writing regarding their costs to buyers.
🚫 The MLS no longer displays commission rates, which may cause confusion for both sellers and buyers brokers.
🔄 Sellers recognize the value that brokers bring by connecting buyers, and this dynamic is not expected to change significantly.
📉 The cost of selling homes may decrease, but the overall trend has been increasing along with house prices.
🌆 Specific markets like Austin and Florida are mentioned as experiencing shifts, with some areas seeing a slowdown or reaching a price ceiling.
🏦 High-end property sales, while not impervious to market trends, still see substantial transactions and can offer good deals.
💹 Interest rate environments and speculations about future cuts by the Federal Reserve have not deterred the market; instead, they've caused a slight backup.
🌐 Despite global uncertainties and multiple ongoing conflicts, the shortage of houses continues to drive the market forward.
🏙️ New York City is highlighted as a resilient market that retains its appeal, with less rent restriction and more opportunities for real estate investment.

Q & A

What is the main topic of discussion in the interview?
-The main topic of discussion is the current state and future of the real estate market, specifically focusing on the negotiability of commissions and the impact on realtors, buyers, and sellers.
What has changed regarding commissions in the real estate market?
-The change is that commissions are now more openly acknowledged as negotiable, which has always been the case, but is now more transparent to buyers who receive everything in writing regarding costs.
Why is communication about commissions not allowed on the MLS?
-Communication about commissions is not allowed on the MLS to prevent sellers and buyers brokers from looking up commission rates, which could potentially influence their negotiations and decisions.
How might the commission structure affect sellers in the real estate market?
-Sellers might not necessarily want to lower the commission as they recognize the value that brokers bring by connecting their buyers. The commission rates might be negotiated slightly, but the overall structure is not expected to change significantly.
What is the current trend in the cost of selling homes?
-The cost of selling homes has been increasing over the past few years, along with house prices. This trend is expected to continue, making it harder to find a good deal in certain markets.
How does the real estate market in Florida look currently?
-The real estate market in Florida is considered overpriced, meaning it's becoming harder to find great deals there. Prices continue to rise, and the market is not as forgiving as it once was.
What is the impact of low-interest rates on the real estate market?
-Low-interest rates could potentially bring more buyers into the market, increasing competition and possibly driving up prices. Waiting for interest rates to decrease might not be beneficial as it could lead to higher costs in the long run.
How does the guest view the potential of the Austin real estate market?
-Austin has seen oversupply in the past, leading to a drop in property prices by 8%. However, the market is expected to stabilize, and the guest does not see it as a market that will get too hot or cold.
What is the guest's perspective on high-end property sales?
-Even in the high-end property market, there are good deals to be found, especially in cash transactions. The guest notes that a significant number of affluent American buyers are participating in these markets.
How does the guest approach the real estate business?
-The guest approaches real estate as a competitor and focuses on educating people about the market. She has found success in investing in areas outside of major cities and appreciates the potential for growth and return in these areas.
What does the guest see as the key to success in the real estate market?
-The guest believes that intelligence and the ability to hire and nurture top salespeople are key to success. She sees herself as a competitor and has built her business on these principles.

Outlines

00:00

🏠 Real Estate Market Dynamics

The paragraph discusses the current state of the real estate market, focusing on the negotiability of commissions for realtors. It highlights that commissions have always been negotiable and that this fact has not changed. The conversation touches on the transparency of costs for buyers and the restrictions on sellers and buyers' brokers looking up commissions on the MLS. The impact of these changes on the market, including the potential for costs to go down for sellers and the recognition of brokers' value by sellers, is also explored. Additionally, the discussion includes observations on the housing market in Florida and Texas, noting the high prices and the difficulty in finding good deals due to rising costs and demand.

05:01

📉 Interest Rates and Market Speculation

This paragraph delves into the impact of interest rates on the real estate market. It suggests that if interest rates were to decrease by another percentage point, it could potentially bring out more buyers who are currently on the sidelines, driving up the market. The speaker advises against waiting for interest rates to decrease, as it may lead to higher costs in the long run. The conversation also addresses the role of speculators in the market and the localized effects of their activities. Personal experiences and preferences in real estate investment locations are shared, emphasizing the importance of understanding local market dynamics and government policies towards real estate development.

10:01

💼 Career and Business in Real Estate

The final paragraph focuses on the speaker's personal journey and perspective in the real estate business. It contrasts the challenges faced by corporate entities with the opportunities available for individuals who are self-employed in the industry. The speaker shares insights on the importance of being a competitor and making one's own rules in business. The discussion also touches on the speaker's approach to hiring and nurturing top salespeople, emphasizing the value of intelligence and the high maintenance required for such individuals. The paragraph concludes with a reflection on the speaker's unique advantages in the real estate field.

Mindmap

Keywords

💡Real Estate

Real Estate refers to the business of buying, selling, renting, or managing properties such as land, buildings, and housing. In the context of the video, the discussion revolves around the changes in the real estate market, the role of realtors, and the impact of commissions on the buying and selling process.

💡Commission

A commission is a fee or percentage paid to a realtor or broker for their services in facilitating a property sale. In the video, the negotiability of commissions is a key topic, with the guest explaining that commissions have always been negotiable and how this impacts both buyers and sellers.

💡MLS (Multiple Listing Service)

MLS is a system that provides a comprehensive and centralized platform for real estate professionals to list and find properties for sale. It is a critical tool in the real estate industry that helps agents and brokers to access a wide range of listings. In the video, the conversation touches on how sellers and buyers brokers can no longer look up commissions on the MLS, which is a significant change in the industry.

💡Negotiable

Negotiable refers to something that can be discussed and changed to reach an agreement between parties. In the context of the video, the term is used to describe the flexibility of real estate commissions, which has been a point of confusion for many.

💡Buyer's Broker

A buyer's broker is a real estate agent who represents the buyer in a property purchase, working to find the best property for the client and negotiate the best possible price and terms. In the video, the role of the buyer's broker is discussed in relation to commissions and the services they provide to clients.

💡Interest Rates

Interest rates are the percentage of a loan that a borrower pays to the lender, typically expressed as an annual rate. They play a crucial role in the real estate market as they affect the cost of borrowing for homebuyers. In the video, the discussion includes the impact of interest rates on the real estate market and how potential changes in rates could influence buyer behavior.

💡Market Trends

Market trends refer to the general direction or pattern of change in the economy, industries, or specific markets, such as real estate. These trends can be influenced by various factors, including supply and demand, economic policies, and investor sentiment. In the video, the guest analyzes market trends in different regions, such as Florida and Texas, and how they impact property prices and availability.

💡Property Taxes

Property taxes are levied by local governments on the assessed value of real estate to fund public services such as schools, infrastructure, and public safety. These taxes are an important consideration for property owners and can significantly affect the overall cost of owning a home. In the video, the topic of property taxes is brought up in the context of the rising costs of real estate and how it influences the decision-making of buyers.

💡Affluent Buyers

Affluent buyers refer to individuals with substantial financial resources who are in the market for high-end or luxury properties. Their purchasing power allows them to invest in trophy properties and can have a significant impact on the luxury real estate market. In the video, the discussion includes the role of affluent buyers in the Manhattan real estate market and their preferences for certain types of properties.

💡Real Estate Investment

Real estate investment involves the purchase of properties with the intention of generating income through rental, resale, or development. It is a strategic financial decision that can offer potential for capital appreciation and cash flow. In the video, the guest shares their personal experiences with real estate investment, emphasizing the importance of education and market understanding.

💡Urban Development

Urban development refers to the process of creating and improving infrastructure, housing, and public spaces in cities and towns. It involves planning and construction activities aimed at enhancing the quality of life and economic growth of urban areas. In the video, the discussion touches on the impact of urban development on real estate markets and the importance of government policies towards real estate developers.

💡Economic Factors

Economic factors are elements that influence the overall performance and stability of an economy, such as employment rates, inflation, and consumer spending. These factors can have a direct impact on the real estate market, affecting property values, demand, and the ability of consumers to purchase homes. In the video, the guest discusses how economic factors, despite uncertainties like wars and market fluctuations, still result in a shortage of houses that pushes the market forward.

Highlights

Real estate expert discusses the current state of the market and the impact of commission negotiability.

Commissions in real estate have always been negotiable, and this aspect has not changed.

Buyers now receive everything in writing regarding the cost of brokers, which is a positive change for transparency.

Sellers and buyers brokers are no longer allowed to look up commissions on the MLS, a change that may affect communication between parties.

The guest believes that the commission rates will not significantly decrease, as sellers recognize the value brokers bring by finding buyers.

There is a misconception that the cost of selling homes will decrease, but the guest argues that prices have been increasing.

The guest suggests that the high demand for homes in certain markets like Florida and Texas may be slowing down.

Even in a seller's market, the guest notes that good deals can still be found, especially for high-end properties.

The guest comments on the role of foreign and American buyers in the Manhattan real estate market.

The interest rate environment is discussed, with the guest suggesting that if rates decrease, more buyers may enter the market.

The guest shares a personal anecdote about growing up in New Jersey and the current state of the real estate market there.

The guest's perspective on the impact of local economies and government policies on real estate markets is provided.

The guest discusses the enduring appeal of New York City for young people and the city's ability to adapt over time.

The guest's experience as a woman in the real estate business and her approach to competition is highlighted.

The importance of intelligence and high maintenance in top salespeople is emphasized by the guest.

The guest's strategy for standing out in the real estate market is revealed, including her fascination with smart people.