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Real estate expert from Million Dollar Listing issues dire warning for house prices in 2024
Real estate expert Kirsten Jordan has warned that house prices in some areas could fall as much as 10 percent this year.
Jordan, who was the first female broker to be cast on Bravo's Million Dollar Listing New York, said that some overvalued markets are due a 'correction.'
'This is the opportunity for buyers to get into the market,' the luxury real estate agent said during a Fox Business interview.
It comes as Redfin CEO Glenn Kelman said that house prices will drop this summer as homeowners trying to wait out elevated mortgage rates realize they cannot wait any longer.
House prices in former boomtowns are already beginning to fall as inventory rises and competition falls for each home.
'This is the opportunity for buyers to get into the market,' the luxury real estate agent said during a Fox Business interview
'I really believe that we're going to see a slight correction in prices of homes,' Jordan said. 'This is the opportunity for buyers to get into the market.'
She said that the area where prices are still very high is the top locations in the US where inventory has always been lower.
'Luxury hotspots will hold pretty strong,' she said.
But it is the parts of the country that saw 'inflated demand that came from really cheap money' when interest rates were low during the pandemic which people should be looking at.
'What we're going to see is there's lagging data around what's going on in the parts of the country that really had artificially doubled the prices of the homes in areas where we don't know where that demand really came from,' Jordan explained.
'It was people moving around the country for a little while when they could work remotely and they had access to a lot of cheap money. I think that's where we're going to see this lagging correction that will come over the next several quarters.'
Jordan predicted that prices could drop as much as 5 and 10 percent in some places.
But she argued against any severe housing crash fears akin to 2007 and 2008.
'We're definitely hoping that is not the case. Right now, it's yet to be seen because the last time we had a decade of very, very low rates is a time when also people only bought maybe one nice coat, and they had two nice pairs of shoes, and maybe they open their refrigerator and they only had a little bit of food in there because they weren't overconsuming,' she added.
She pointed out that Americans are now in a place where they expect 'cheap money', and they overspend and overconsume.
She said that it is difficult to predict what could happen to the market because it is now so wrapped up in everything else - including credit card debt.
While she said that she thinks higher mortgage rates will be around for a bit longer, she does not think we're going to see '20 years of double digit interest rates like we did in the 1970s and 80s.'
The average 30-year fixed-rate mortgage currently stands at 6.99 percent, according to latest data from government-backed lender Freddie Mac.
It comes as Redfin CEO said in an interview earlier this month that there are signs that the housing market is beginning to get more affordable in certain areas.
Homes in major metros in states including Florida in Texas are already seeing 'major price cuts,' Kelman said in an interview with financial expert David Lin.
The real estate company boss said the reason prices are falling is because homeowners are giving up on waiting for mortgage rates to fall before they sell.
Tampa is among the cooling house markets on Florida's west coast, according to Redfin
As more people decide to put their home on the market, inventory grows, which begins to bring prices down, he said.
New data from the brokerage earlier this month found housing markets on Florida's west coast are cooling faster than anywhere else in the US.
New construction is soaring - bringing the number of listings up to pre-pandemic levels - which means there is less competition for each home.
On top of that, soaring insurance costs and a sharp rise in natural disasters are discouraging people from settling in the area.
A cooling housing market typically occurs when there are more sellers than buyers. Prices fall and homes sell slowly - and below the asking price - while inventory levels creep up.
The opposite happened in Florida during the pandemic when it became one of America's hottest markets - but there now appears to be a reversal. It gives hope to those wanting to buy, but is a huge blow to those who purchased in recent years.
The housing market in North Port is cooling fastest - followed by Tampa and Cape Coral, the analysis found.