Is a Housing Crisis Near?

Real Estate Agent with HomesFinder Realty Group SC44235

Many are wondering if our economy is headed for a recession, especially after so many years of economic growth in the US.  Indeed, even economists and analysts are of the opinion that a recession is looming. This was backed up by Zillow Research, which recently reported on a Pulsenomics survey that analyzed the housing market by surveying market analysts and experts.  This report also indicated when the next recession could begin:

Experts largely expect the next recession to begin in 2020.”

That statement also agrees with a recent survey of economists by the Wall Street Journal:

“The economic expansion that began in mid-2009 and already ranks as the second-longest in American history most likely will end in 2020 as the Federal Reserve raises interest rates to cool off an overheating economy, according to forecasters surveyed.”

Does this mean that we should worry about a housing crisis?  No.

Here's how the Merriam-Webster Dictionary defines a recession:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

When an economy goes through a recession, it slows down, as we experienced in 2008. But that doesn't mean a housing crash will occur. As you may recall, in 2008 the housing bubble burst, causing the recession, not the other way around. In fact, during the previous five recessions home values appreciated.

According to the experts in the report, the top three probable triggers for the next recession are:

  • Monetary policy
  • Trade policy
  • A stock market correction

A housing market crash came in 9th in this list. Those same experts also projected that home values would continue to appreciate in 2019, 2020, 2021 and 2022.

There are other experts who agree that the housing market won't be affected by a recession:

Mark Fleming, First American’s Chief Economistexplained:

“If a recession is to occur, it is unlikely to be caused by housing-related activity, and therefore the housing sector should be one of the leading sources to come out of the recession.”

And U.S. News and World Report agreed:

“Fortunately – and hopefully – the history of recessions and current issues that could harm the economy don’t lead many to believe the housing market crash will repeat itself in an upcoming decline.”

To sum it up, a recession may be in our future, but it doesn't mean that there will be a housing crisis.

Join us on our blog every week for more Beaufort area real estate news and advice.  And make sure to follow us on Facebook for the latest real estate updates for Beaufort and the surrounding areas


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William Feela
Realtor, Whispering Pines Realty 651-674-5999 No.

Why is everyone looking for a turn down...don't you know how to make money in a booming market.

As for Zillow...they can't even price a home right how are they going to get the economy right.
Get professional...stay away from the lead gen companies

Jun 29, 2018 03:06 PM #1
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Mike Sackman

Realtor, Broker ABR, CRS. All around good guy!
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