If you’re afraid that an impending recession will disrupt your real estate goals, here are a few recession myths you shouldn’t believe.
Myth #1: A recession equals a housing crisis.
The true definition of a recession is when GDP growth slows or shrinks over two consecutive quarters, and a GDP slowdown doesn’t necessarily have anything to do with the housing market or home prices.
Myth #2: Any recession will resemble the 2008 recession.
When it comes to the 2008 recession, real estate was its No. 1 trigger, and conditions were made worse by the toxic mortgage market that existed at the time. Recently though, top economists surveyed by The Wall Street Journal listed our trade war and stock market volatility as the top two triggers of any future recession. The housing market ranked as the ninth-highest trigger on that list. This shows you how much confidence economists and investors have in our market compared to 2008.
Myth #3: Home prices can’t appreciate during a recession.
As you can see at 2:01 in the video above, during three of the last five recessions, home prices did, in fact, appreciate. And during two of those recessions, the appreciation rate more than doubled the national average.
So what does this mean for buyers and sellers? If you’re a buyer (or someone who currently rents), don’t let fear overcome you and make your decisions for you. Pay close attention to our low interest rates and the opportunities that exist in the more affordable markets. Make the necessary sacrifices to get into the market and let time do the heavy lifting for you.
If you’re a seller—especially one who’s looking to upsize or move to a better area—pay careful attention to interest rates and the inventory in your neighborhood and price range. Changes in any one of those factors will change the demand for your home.
If you have any more questions about our market or you have any other real estate needs I can take care of, don’t hesitate to reach out to me. I’d love to help you.