Now that we have entered into a new year, and an election year at that, talk of recession is on the rise. Using tools as a seasoned real estate broker and my degree in Economics from the University of Washington, as well as by researching current trends and staying abreast of the latest forecasts from economists, I am able to put my clients at ease and assuage their fears about a possible recession affecting the market value of their homes.
The first thing that I would encourage any of my concerned clients to consider is the past real estate market trends when a recession has occurred. The recession of 2008 was unique; because one of the primary causes of that recession was the failure of the sub-prime mortgage market, housing prices and mortgage interest rates were directly affected. However, if you look at my infographic to see how the real estate market has held up during the last five recessions, during three of those periods, housing prices actually appreciated. And, in 1991, although housing prices were affected, the drop was a meager 1.9%. Could there be a recession in 2020? It’s possible. In his 2020 forecast, Matthew Gardner, Chief Economist for Windermere Real Estate, said, “[Like many economists, I] spent much of 2019 worried about the specter of a looming recession in 2020. Thankfully, such fears have started to wane (at least for now). Despite some concerning signs, the likelihood that we will enter a recession in 2020 has dropped to about 26%. If we manage to stave off a recession in 2020, the possibility of a slowdown in 2021 is around 74%. That said, I fully expect that any drop in growth will be mild and will not negatively affect the U.S. housing market.”
My goal as real estate broker is to educate my clients so that they feel empowered and knowledgeable when it comes to what is perhaps their greatest investment. If you have any questions or concerns, please reach out, and I will provide you with the information you need to be a confident consumer in the ever-changing real estate marketplace.