We’re in a recession, now what?

When you hear the word recession do you immediately think housing crisis?

Does a recession equal a housing crisis?

Will home prices drop? And more importantly, will your home lose value?

It was recently reported our economy has contracted for 2 consecutive quarters this year, meeting several textbooks and common definitions of a recession.

Oddly, recessionary periods are typically not labeled until our economy has improved and we start to exit the economic down period. So, let’s assume we are currently in the home. Does a recession equal a housing crisis?

It’s very unlikely.

Since 1975, home prices have increased in 166 or 186 financial quarters.

And in the last 6 recessions – homes prices actually increased in the last 4.

Since 1980, home prices have increased on average 5.5% during 4 recessionary periods. During the housing crash and recession in 2008, housing prices decreased significantly – but the underlying reasons were completely different than our current economic environment. And oh, no economist is predicting THAT again!

Yes, the housing market has changed. The froth, gangbuster pace is over. In fact, if THAT continued – we likely would be talking about a bubble bursting, crash or how to protect your home from losing value.

But, decelerating home prices does not mean depreciating home values. The average of the top 7 forecasters for home prices report we will see an 8.5% increase in home values in 2022.

And through 2026, forecasters see a normal home value appreciation of 3-4%.

According to Realtor.com …. Experts don’t believe the market is in a bubble or a crash is in the cards, like the Great Recessions. The nation is still suffering from a housing shortage that has reached crisis proportions at a time when many millennials are reaching the age when they start to consider homeownership. That’s likely to keep prices high.

If you’re waiting for home prices to drop to buy a home.You may be waiting for a really long time.