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Recession? Yes. Housing Crash? No.

Recession? Yes. Housing Crash? No.

With over 90% of Americans now under a shelter-in-place order, many experts are warning that the American economy is heading toward a recession, if it’s not {in a single} already. What does {which means that} to the residential real estate market?

What {is really a} recession?

According to the National Bureau of Economic Research:

“A recession {is really a} significant decline in economic activity spread {over the} economy, lasting {lots of} months, {visible in real GDP normally,} real income, employment, {commercial} production, and wholesale-retail {product sales|revenue}.”

COVID-19 hit the pause button on the American economy {in the center of} March. Goldman Sachs, JP Morgan, and Morgan Stanley {are} calling for a deep dive {throughout the market} in {the next} quarter {of the} year. {Though {we might} not yet {maintain} a recession by the technical definition of {the term} today,|Though {we might} not yet {maintain} a recession by the technical definition of the expressed word today,} {most believe history will show we were {in a single} from April to June.|from April to June most believe history will show we were {in a single}.}

Does {which means that} we’re headed for another housing crash?

Many fear a recession {means} a repeat of the housing crash that occurred {through the} Great Recession of 2006-2008. {Days gone by}, however, {shows us {that a lot of} recessions {usually do not} adversely impact home values.|shows us {that a lot of} recessions {usually do not} impact home values adversely.} Doug Brien, CEO of Mynd Property Management, explains:

“{Apart from} two recessions, {the fantastic} Recession from 2007-2009, & the Gulf War recession from 1990-1991, no other recessions have impacted the U.S. {housing marketplace}, {in accordance with} Freddie Mac Home Price Index data collected from 1975 to 2018.”

CoreLogic, in {another} study of the last five recessions, found {exactly the same}. Here’s a graph {of these} findings:Recession? Yes. Housing Crash? No. | Simplifying {THE MARKETPLACE}

What {will be the} experts saying {this time around}?

This is what three economic leaders {say} about the housing {link with} this recession:

Robert Dietz, Chief Economist with NAHB

“The housing sector enters this recession underbuilt {instead of} overbuilt…That means {because the} economy rebounds – which {it’ll} at some stage – housing {is defined} to help lead {just how} out.”

Ali Wolf, Chief Economist with Meyers Research

“Last time housing led the recession…This time it’s poised {to create} us out. {This is actually the} Great Recession for leisure, hospitality, {trade and transportation {for the reason that} this recession will feel as bad {because the} Great Recession did to housing.|trade and transportation {for the reason that} this recession shall feel as bad {because the} Great Recession did to housing.}”

John Burns, founder of John Burns Consulting, also revealed that his firm’s research {figured} recessions {the effect of a} pandemic {will not} significantly impact home values:

“Historical analysis showed us that pandemics {are often} V-shaped (sharp recessions that recover quickly enough {to supply} little {harm to} home prices).”

Bottom Line

{

If not in a recession we’re yet,} we’re {going to} be in one. {This right time,} however, {housing {would be the} sector {leading} the economic recovery.|housing {will be} the sector {leading} the economic recovery.}

You {may also} enjoy reading…

Oliver and Devinee Overton-Morgan
Morgan Property Solutions
Orlando Property Management
Orlando Property Manager
Property Manager in Orlando
Orlando Real Estate

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