A recession is looming, but there’s no reason to believe it will look anything like the crash of 2008.
The stock market is close to all-time highs, unemployment is extremely low, and inflation is still seemingly in check.
And yet, this might be the last party before the crash.
A recent Wall Street Journal poll of 73 economists found that the majority believe a recession is coming in 2020. Current homebuyers in the market echo these predictions, with 70% believing a recession will come in the next few years.
What does this mean in terms of our housing market? Nationwide, home prices continue to slow in growth. On top of that, the number of homes sales has slowed down too. This reminds me of the time between 2006 and 2008, but do we automatically think history will repeat itself? I don’t think so, and there are a couple of reasons why.
First of all, unlike in 2008, there aren’t a ton of bad mortgages out there. Back then, practically anyone could qualify for a mortgage. These days, a lot of rule changes have been implemented to protect the future of the housing market.
Second, the looming recession will not be an exception. In recessions past, the housing market as a whole wasn’t affected the way it was in 2008. In my opinion, homes that are still desirable will continue to sell—even in a recession. Homes that are overpriced, don’t have the same features as the rest of the homes, or are somewhat affected by this recession will take longer to sell. That’s just the reality of the situation.
If you’re a home seller, this means you need to focus on your needs, goals, and circumstances. After that, examine the market environment and look toward the future to see what makes sense for you. If you’re curious what your Orange County home is worth, you can use our home value calculator right here on our website.
If you’re thinking of buying a home and are wondering if now’s the time to do it, you need to figure out what your short-, medium-, and long-term goals are. It might be in your best interest to rent, but it’s a good idea to get a feel for the available inventory before you make a final decision.
Whether you’re looking to buy, sell, or invest, everyone’s needs are different, so if you have any more questions about our current market and how it affects you, don’t hesitate to give me a call or send me an email. I’d love to speak with you and help you reach your future goals.