Real estate expert Kirsten Jordan, a former Bravo star and “Million Dollar Listing” agent, recently opened up about signs of a potential “housing doomsday”, explaining that the housing market is currently going through something that’s never been seen before.
Jordan was able to explain the uniqueness of 2024’s housing market during an interview with Neil Cavuto on Fox Business.
A Housing Doomsday
After host Cavuto asked her how she would describe a potential “housing doomsday” in the United States, Jordan explained that our current housing situation has never been seen before.
Jordan stated, “This is something we actually haven’t seen in our lifetime that we can remember. If you think about the last time that we spent a decade with rates that were sub-5%, that was actually the 1950s.”
Attempting to Deal With a New Market
Jordan also revealed that even high-grossing agents like her are struggling in their attempt to deal with this new type of housing market.
Many analysts have stated that the U.S. is going through a form of a housing crisis, as housing costs have continued to skyrocket, pricing many regular Americans out of the market as a whole.
Low Inventory, High Demand
While there are many factors likely driving up the cost of homes across the United States, a lack of a large inventory has hurt the market — and greatly driven up the price of homes.
Certain areas of the country, such as California, have greatly struggled because there are simply not enough homes up for sale. As a result, the homes that are for sale are being sold at a higher rate, simply because of the high demand for homes.
An Upcoming Correction
However, Jordan also explained that she doesn’t think we’ll see what was normal a few decades ago. Instead, she believes that we’ll eventually see price corrections.
“I don’t think we’re going to see 20 years of double-digit interest rates like we did in the ’70s and ’80s,” Jordan stated. “And I really believe that right now we’re going to see a slight correction in prices of homes. This is the opportunity for buyers to get into the market.”
Lack of Inventory Continues to Hurt the Market
Unfortunately, this correction hasn’t been seen yet — and Jordan believes we have the market’s low inventory to blame.
Because there still aren’t enough homes being sold on the market, prices haven’t had the chance to go down. However, once more homes are put up for sale, price corrections may eventually be seen — and costs may soon go down.
Location and Inventory Drives Up Prices
The real estate expert also pointed out that location can make costs skyrocket easily.
She explained, “What we know is working is location, location, location. Those are the areas where they’re still holding prices very, very strong. We’re seeing that there’s a lack of inventory in the top locations in the U.S. that never had an issue in the first place.”
Will the U.S. Have Another Housing Crash?
While some real estate agents have warned that a housing crash could happen, Jordan has remained optimistic that this won’t be seen anytime soon.
“[A housing crash] is yet to be seen because, again, 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 stated.
A New Type of Housing Crisis
Jordan again explained that the world is different now — and the housing market is going through things that really haven’t been seen before.
Americans spend their money differently than they did during the previous housing market crash. Now, more Americans are overspending and overconsuming, according to Jordan.
A Different America
Because of this overconsumption, Jordan can’t really anticipate what may happen with the housing market, as the market is so intertwined with the rest of the economy and how consumers spend.
She explained, “We’re in a whole different place where we expect cheap money, we overspend, we overconsume. And so there’s credit card debt, there’s so many layers to this that I don’t think it’s so easy to say what’s going to happen to housing, because it’s all wrapped up in everything else.”
Overvalued Homes
Jordan’s comments come after a recent report by Fitch Ratings revealed that homes are now overvalued by at least 11.1%. This trend can also reportedly be seen in nearly 90% of all U.S. metro areas.
As high mortgage rates and a continuing housing shortage continue to keep prices high, many Americans have stated that they can no longer afford to buy a home. They feel completely shut out of the market.
When Will Prices Fall?
Even with these reports pointing to a rather dismal housing situation, some analysts still believe that prices will soon fall. Redfin recently declared that home prices will fall as early as this summer.
However, as mortgage rates continue to rise, this could further keep buyers away from the market as a whole.
