Leave a Message

Thank you for your message. We will be in touch with you shortly.

Is a Recession Here? Does that Mean a Housing Crash?

On Monday, the National Bureau of Economic Research (NBER) announced that the U.S. economy is officially in a recession. This did not come as a surprise to many, as the Bureau defines a recession this way:
 
“A significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. It begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”
 
Everyone realizes that the pandemic shut down the country earlier this year, causing a “significant decline in economic activity.”
 
Though not surprising, headlines announcing the country is in a recession will cause consumers to remember the devastating impact the last recession had on the housing market just over a decade ago.
 
The real estate market, however, is in a totally different position than it was then. As Mark Fleming, Chief Economist at First American, explained:
 
“Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.”
 
Four major differences in today’s real estate market are:
 
  1. Families have large sums of equity in their homes
  2. We have a shortage of housing inventory, not an overabundance
  3. Irresponsible lending no longer exists
  4. Home price appreciation is not out of control
We must also realize that a recession does not mean a housing crash will follow. In three of the four previous recessions prior to 2008, home values increased. In the other one, home prices depreciated by only 1.9%.
 

Bottom Line

Yes, we are now officially in a recession. However, unlike 2008, this time the housing industry is in much better shape to weather the storm.

Recent Blog Posts

Stay up to date on the latest real estate trends.

Luxury Home Design Trends for 2024

Evolving Styles and Innovations Redefining Prestigious Living.

Tips for Hiring a Remodeling Contractor

Choosing the Right Partner for Your Home Transformation.

How to Find a Real Estate Agent

Your Guide to a Smooth Home-Buying Experience.

Most Googled Questions About Real Estate in 2024

Answers You Need to Know.

Everything You Need to Know About Getting Your Home Inspected Before Selling in Jupiter, Florida

A Comprehensive Guide to Streamlining Your Home Sale Process and Maximizing Your Property's Value.

How to Buy a Luxury Home in Jupiter, Florida

Your Ultimate Guide to Purchasing a High-End Property in One of Florida's Most Prestigious Locations.

Essential Home Office Design Tips for Luxury Homes in Jupiter, Florida

Transforming Your Workspace into a Haven of Productivity and Style.

The Ultimate Guide to Home Inspection Before Buying

Navigating the Intricacies of Home Inspections in the Sunshine State.

Things to Do in Jupiter, FL: A Comprehensive Guide

Discover the Best Activities and Attractions in Jupiter, FL.

View All

Work With Us

Our team knows all there is to know about living the South Florida lifestyle and the amenities each area has to offer. We are luxury home marketing specialists and work closely with astute buyers and sellers who want the best that Palm Beach Gardens and the surrounding areas have to offer. We're looking forward to helping you achieve your dream goals.

Contact Us
Get in Touch
Contact Details

MICHAEL BRUE

(561) 301-3287
[email protected]



5370 Donald Ross Rd

Palm Beach Gardens FL 33418