Homebuyers Shouldn't Worry about 2008 All Over Again

Dated: 04/03/2019

Views: 102



Last week, realtor.com released a survey of active home shoppers (those who plan to purchase their next home in 1 year or less). The survey asked their opinion on an impending recession and its possible impact on the housing market.

Two major takeaways from the survey:

  • 42% believe a recession will occur this year or next (another 16% said 2021)
  • 59% believe the housing market would fare the same or worse than it did in 2008

Why all the talk about a recession recently?

Over the last year, four separate surveys have been taken asking when we can expect the next recession to occur:

  1. The Pulsenomics Survey of Market Analysts
  2. The Wall Street Journal Survey of Economists
  3. The Duke University Survey of American CFOs
  4. The National Association of Business Economics

70% of all respondents to the four surveys believe that a recession will occur in 2019 or 2020 with an additional 18% saying 2021.

However, we must realize that a recession does not mean we will experience another housing crash. According to the dictionary definition, a recession is:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

During the last recession, a dramatic fall in home values helped cause it.

However, according to research done by CoreLogic, home values weren’t negatively impacted as they were in 2008 during the previous four recessions:

Homebuyers Shouldn’t Worry About 2008 All Over Again | MyKCM

During the four recessions prior to 2008, home values depreciated only once (at a level that was less than 2%). The other three times home values appreciated, twice well above the historic norm of 3.6%.

Bottom Line

If there is an economic slowdown in our near future, there is no need for fear to set in. Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained that there’s no reason to panic right now, even if we may be headed for a recession.

“We’re seeing a cooling of the housing market, but nothing that indicates a crash.”

Blog author image

Lucy Mehlen

https://www.youtube.com/watch?v=jJZRde18a4A....

Latest Blog Posts

4 Things Buyers Should Not Forget to Do Before Buying a Home

Summer selling season is here and I want to make sure you are ready and prepared to buy your next home.  Here are 4 things, I recommend buyers not forget to do before purchasing a home:1) 

Read More

Welcome Gnome Says YES YES YES

Let Us Show You The IMPACT And Power Of RE/MAX!I can help you find real estate to meet your needs.  If you are ready to buy or sell your home in San Antonio give me a call.  

Read More

Your Home Air Conditioner Needs A Regular Tuneup Just Like Your Car Does

How Ready Is Your Home’s Air Conditioner This Summer?Your home’s air conditioner needs a regular tune-up just like your car does. If you don’t know much about air conditioners, here are

Read More

Three Subtle Painting Tricks That Will Make Your Home Look Amazing

When it comes to painting the walls of a house, sometimes subtle is best. You want to add design, color, and texture to the walls, but you don't want it jarring to the eyes. Here are three subtle

Read More