What Homeowners Need To Know About The Impending Recession
Dated: April 22 2020
Yes, the news is grim, but the first step toward operating in a place of calm is to gather perspectives and facts. Today I’m offering both.
I’ve been doing some research to better understand how a recession will affect real estate. According to the National Bureau of Economic Research, a recession is defined as a significant decline in economic activity spread across the economy lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
COVID-19 hit the pause button on our American economy in the middle of March. Goldman Sachs, JP Morgan, and Morgan Stanley are all predicting a deep dive in the economy in the second quarter of this year. While today we may not be in a recession by the technical definition of the word, most people believe that history will show we were in one from April to June 2020. Does that mean we’re headed for a housing crash like what we saw in 2007 through 2009?
History shows that most recessions do not negatively impact home values, with two recent exceptions: the Gulf War recession of ‘90 to ‘91, and the Great Recession of ‘07 to ‘09. No other recessions have impacted the U.S. housing market. What are economic leaders saying about this downturn?
Ali Wolf, chief economist with Meyers Research stated, “Last time, housing led the recession; this time, it’s poised to bring us out. This is the Great Recession for leisure, hospitality, trade, and transportation, in that this recession will feel as bad as the Great Recession did for housing.”
Lastly, John Burns, of John Burns Consulting states, “Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices), and some very cutting-edge search engine analysis by our information management team showed the current slowdown is playing out similarly thus far.”
Here’s the bottom line: We’re not in a recession yet, but we’re about to be in one. The difference is, this time, real estate will be the sector that leads the recovery.
I hope that you and your family are staying healthy as we all continue to respect our statewide shelter-in-place order. If you find yourself in a place of fear, please remember: This too shall pass. We’ll get through this together.
If we can assist you in any way and help you to have a firmer grasp on what’s happening in the real estate market, please feel free to reach out to us by phone or email. We’re always here for you.
This Blog courtesy of Will Cook, WILL COOK GROUP | Keller Williams Luxury Homes, Palm Springs, CA | DRE #01879277
Ranked in the top 1% of all agents valley wide and named one of the Palm Springs Life Top Realtors for 2019 and 2020, Will is an Associate Broker/Team Leader of the WILL COOK GROUP with Keller William....
WILL COOK GROUP | Keller Williams Luxury Homes | DRE# 01879277
435 N. Palm Canyon
Palm Springs, CA 92262 760-565-5714
Should you require assistance in navigating our website or searching for real estate, please contact our offices at 760-565-5714.
The information being provided by SoCalMLS, CRISNet Regional MLS, CARETS is for the consumer's personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumer may be interested in purchasing. Any information relating to real estate for sale referenced on this web site comes from the Internet Data Exchange (IDX) program of the SoCalMLS, CRISNet Regional MLS, CARETS. ZipRealty, Inc. is not a Multiple Listing Service (MLS), nor does it offer MLS
access. This website is a service of ZipRealty, Inc., a broker participant of SoCalMLS, CRISNet Regional MLS, CARETS. This web site may reference real estate listing(s) held by a brokerage firm other than the broker and/or agent who owns this web site.
The accuracy of all information, regardless of source, including but not limited to open house information, square footages and lot sizes, is deemed reliable but not guaranteed and should be personally verified through personal inspection by and/or with the appropriate professionals. The data contained herein is copyrighted by SoCalMLS, CRISNet Regional MLS, CARETS and is protected by all applicable copyright laws. Any unauthorized dissemination of this information is in violation of copyright laws and is strictly prohibited.
Copyright 2020 SoCalMLS, CRISNet Regional MLS, CARETS. All rights reserved. Certain information contained herein is derived from information which is the licensed property of, and copyrighted by, SoCalMLS Inc
Data last updated: October 19, 2020 6:55 PM UTC
If a listing displays "Short Sale/Subject to Lender Approval" then that listing has been identified by the seller and the listing broker as a "Short sale." This means that, at the listed price, the proceeds from the sale may not be adequate to pay all liens and costs of sale. Any offer made that does not fully cover the existing amount(s) owed to the lienholder(s) plus the costs of sale could be subject to lienholder approval, which approval may be exercised at the sole and exclusive discretion of the lienholder(s).