Barbara Corcoran: This would make the real estate market go ‘ballistic’

Markets did move up on this, equities did. I also noticed that the yield on the 10-year note, which had been slipping down again on these concerns of what's going on between Russia and Ukraine, started backing up again. So maybe we're back to this idea of a overheating economy and this idea that it could lead to still higher interest rates. Austin Goolsbee on the wires, the Chicago Fed president saying that they might have to slow the pace of those rate cuts because of these inflation concerns. I'm just cutting to the chase here. Barbara Corcoran, now the Corcoran Group founder, Shark Tank aficionado, much, much more. Brilliant read of real estate too. Barbara, great to have you. Thank you. A lot I'm throwing at you, Barbara, and you always handle it deftly. But first off on the rate environment right now, between all these headlines and everything, rates have been backing up. And we just saw a 30-year fixed rate mortgage. It's up to 6.84 percent from 6.78 percent last week. That was before the market rate run up. So how do you view the environment right now for lending? Well, I think what we're losing right now and we desperately need is more first-time buyers. Less than 24 percent of the people buying now are first-time buyers at an all-time low. So rates have been bouncing around a while now, 6 to 7 percent. So people are confused. They don't have big expectations. They're no longer waiting for a tremendous rate drop. If that happens, God, it would be incredible for the market. But in the last year, or pardon me, in the last month alone, we have sold three and a half percent more houses despite what's going on in the interest rates. But the first-time buyers aren't much a piece of that. You know, I noticed as well U.S. existing home sales, like you say, up 3.4 percent October. It's the first year-over-year gain I think we've seen in the better part of three years. So what was going on there? Because that surprised me. Well, it doesn't surprise me because there's more houses on the market. So there were 25 percent more choices for the buyer coming out into the market and looking. And on top of that, the buyers themselves have gotten accustomed to the rates being what they are, and they just got tired of waiting. But I am wondering if we'll ever see a 5 percent number, because anything with a 5 percent in front of it is going to make this market go ballistic. But right now, you're already seeing those signs in the last month. You know, you've reminded me in the past that sometimes it's psychological for a lot of folks, and a lot of them look at that 7 percent handle on a fixed-rate mortgage, get close to or over that. You could tax this recovery or whatever you want to recall it. But what do you say? Oh, if it went higher, of course it would slow down the whole market. It would slow down the whole economy. It would slow down all the support services for the housing market. It would be a terrible thing. But I don't think people are thinking it's going to go much up, if you really listen to the experts. That could happen, but I don't think you're going to see interest rates above 7 percent again. I'm hoping that it's going to go and hover around 6 or even go lower. All right. Well, you have a better track record than a lot of those so-called experts. I'm going to go with you, Barbara. But you know, the one thing that is out there, the worry, is that Donald Trump, say what you will of him, he has aggressive plans to spur the economy. You know, the tariff thing, the talk that he is going to pour a lot into tax cuts that could juice the economy, so much so that some worry it's going to get prices going higher. We don't know for how long or how much, but that will be the inevitable consequence of what he's offering. Do you agree with that? I do agree with that. I think inflation is on everybody's mind, and I think it's risky. So I think we're going to find out. I guess it's like What about some of his Cabinet picks? You probably just heard that Matt Gaetz is out of the running for attorney general. But of the picks you've heard thus far and who he's considering for Treasury and some of these other economic positions, what do you think? I have no opinion. It's like watching a checker match. See who's there. See who remains on the board and who's hopping around. We're going to get great entertainment anyway. All right. We do know whoever he chooses for Treasury, Barbara, is going to be someone who embraces the concept of tariffs and also will be very pro-giving this economy all the goosing it can get. And they have to be on the same page with that. What do you think of that, of those qualifications? I think anyone who wants to see any change at all has to be on Donald's page or it ain't going to happen. Yeah, you're probably right. So let me step back and take a look at what's happening now in the once hot markets. For all I know, Barbara, they're still hot, like in Florida, Palm Beach County, in some areas of Texas, of course, which are really, really hot. We're told that it's not quite as hot because the same conundrum of people who own a lot of homes are reluctant to give them up and those low mortgages attached to those homes and then whatever they sell at an appreciable run of their own home for, they're going to have to find something else and that's going to be pricey. Therein lies the problem for real estate. So we have a stuck market, yes, but it's not just in the South. My gosh, the South hasn't done as well as the Midwest. The Midwest prices have gone up 7% compared to one year ago. That's incredible. 7% in one year when everybody's talking about this market being so bad. I think it's a vital market. It's got a lot more steam in it. And again, I just say, I'm just waiting for that 5% number, anything with a 5% and you're going to be moving, Neil, and I'm going to be selling your house. Yeah, you know, Barbara, that's a long way to go and it could happen, but normally you'd associate that with a weaker economy or whatever. So it could still happen, but I cannot see it so soon, but could I get your sense of who's buying? We're told that young people in particular are getting older and older and older when it comes to buying. Either they can't afford to, or they're waiting to get their careers going, but the average age of buyers is now creeped up into, you know, first time buyers is now creeped up into the early to mid-30s. What do you think of that? I think it locks so many people out of the market. What is more disturbing to me is the number of first-time buyers are now at 24%, the lowest in history, and the number of old cash buyers is at the highest in history. It's at 27%, and the average age of the individual buying their first-time home now, it doesn't look like a first-time buyer. They're, as you said, they're like 35, many are 45, and that's the first chance they have to buy a home. It's mostly because of the interest rates. I say my prayers and pray for lower interest rates. Yeah, that'll be crucial. Some talk about a bubble in some of those hot markets, particularly in Florida. Now, do you see a bubble? I read a lot of that press, and they say, yeah, it's out there, but I don't see the devil may care flipping of properties, anything like that, that accompanied the last bubble. What do you say? No, this is nothing like the last bubble. Right now, only 3% of the buyers in the marketplace are investors. That's what creates a bubble big time when you get a lot of investors. Now, these are home users. They live in their spaces, whether it be their first, second, or third home. No, I don't see a bubble at all. I especially see right now that the houses are staying on the market hardly long enough for people to buy them, and a number I always watch is what percentage of the houses are going to overbid, and a year ago, it was 25% of the houses went to overbid. Right now, it's still at 22%. So you might say, well, that's not so good, and the bubble is breaking, but I don't see that at all. When houses go to overbid, you're a long distance from a bubble. That's fascinating. That's a very good angle to look at. I miss that. I miss a lot of things. Barbara, thank goodness you're here to straighten me out. Always good seeing you. Barbara Corcoran, Hondo's Development.