Is An Economic Recession Looming? How will it affect the housing market?
I know this is a very tough time. Today is March 26th, 2020. So I wanted to share some positive news, right. Everything we're hearing obviously is going to be very tough economically, but the good news is that economic recessions historically do not result in housing recessions.
Other than the 2008 mortgage crisis that actually caused housing prices to go down, past economic recessions, real estate prices actually stay flat or they even increase during this time.
We have a much more healthy housing environment then we had back in 2008, it's tough to qualify for a mortgage, payments are affordable for most people, and we have strong homeownership equity.
Other positive news is that even when we've seen a market correction like we did in the dotcom and 9/11 area where the S&P 500 went down 45%, we actually saw home prices increase during that time, about 24%. So lots of positive reasons why we anticipate home prices to stay stable.
The other good news here is that Goldman Sachs and other analysts right now are projecting an actual increase, returned increase in gross domestic product in the third quarter and that's usually the sign of getting out of a recession.
So unlike The Great Recession where it lasted 18 months, this is anticipated to be much shorter.
Obviously things are on hold, we're getting new information every day, we're all on pause, we're staying at home. But again there's a lot of reasons why we anticipate housing prices to stay steady or actually increase despite what's going on.
If you guys have any questions for me, wanna talk about anything at all, I'm always here for you, so please reach out anytime.
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