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A growing chorus of influential and wealthy public figures have escalated fears of a looming real estate crisis as a vote to suspend the debt limit moved to the Senate on Thursday in a race to shut down a potential government default.

In only the past week, public comments from real estate billionaire Ross Perot Jr, Corcoran Group founder Barbara Corcoran, Twitter owner Elon Musk and Big Short investor Dave Burt have warned of an impending “real estate recession,” “bloodbath” and “meltdown,” citing various causes for a downturn.

“It’s great to say pennies on the dollar, but no one has the confidence to buy now,” Corcoran said Wednesday in an interview on Fox Business, referring to the commercial sector. “No one really believes it’s going to turn the corner. I don’t see that turning around. I think it’s going to be a bit of a bloodbath before it gets better.”

Corcoran, a star of the popular entrepreneurial gameshow Shark Tank, noted however that she expects the residential real estate sector to rise again as soon as mortgage rates, which earlier this week hit a 2023 high of 6.91 percent, subside.

A recent Zillow analysis concludes that mortgage rates could hit 8.4 percent in the unlikely event that the U.S. does default, raising the monthly payments for borrowers taking out mortgages in the future by 22 percent.

“Right now, what everybody’s afraid of is the high-interest rates,” Corcoran added, during her interview on “The Claman Countdown.” “But the minute those interest rates come down, all hell is going to break loose and prices are going to go through the roof,” Corocran said. “The house prices, I would not put it by the housing market that prices go up by 20 percent. We could have COVID all over again.”

In addition to Corcoran sounding the alarm, a common thread among the wave of recent warnings was the distressed state of the commercial real estate sector, with office valuations threatening to plunge as much as 40 percent as higher interest rates make it harder for investors to refinance trillions in looming debt.

Perot Jr, the son of former Independent presidential candidate Ross Perot and the chairman of the Perot Group, warned in an interview with Bloomberg TV on Tuesday that a “real estate recession” could be imminent if banks don’t start loaning again.

“If the industry can’t get a construction loan, real estate will have a recession,” Perot said. “The key to commercial real estate today will be banking.”

Perot said during the interview that it’s gotten so challenging for builders to get construction loans that his development company, Hillwood, is helping finance other developers.

Musk however, in comments made on the social media website he purchased last year, offered a different theory, predicting that home valuations would follow office prices in dropping.

“Commercial real estate is melting down fast. Home values next,” tweeted the billionaire, who claims to have sold off all his homes while sleeping on friends’ couches.

Musk’s comments were quickly met with rebuttals by leaders in the residential real estate space, most notably from Redfin CEO Glenn Kelman who pointed out that residential real estate isn’t suffering from the same lack of demand as commercial real estate has since the onset of remote work.

“The loss in demand for commercial real estate is what’s driving demand for residential real estate,” Kelman wrote. “People who work from home need more space at home. Sales volume is down because inventory is down. Today, home prices increased for a second straight month.”

Indeed data released this week via the S&P CoreLogic Case-Shiller Index shows that United States home prices rose 0.7 percent during March compared to a year before — the second straight month that prices increased leading many experts to suggest a period of annual price declines may be coming to an end.

Existing-home sales, however, fell 3.4 percent in April to an annual pace of 4.28 million as the inventory of homes for sale reached 1.04 million units — a 7.2 percent gain from March.

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