Will the real estate market "bubble" burst again?

By
Real Estate Agent with RE/MAX Results
https://activerain.com/droplet/5hS6

Last week, realtor.com released a survey of active home shoppers (those who plan to purchase their next home in 1 year or less). The survey asked their opinion on an impending recession and its possible impact on the housing market.

Two major takeaways from the survey:

  • 42% believe a recession will occur this year or next (another 16% said 2021)
  • 59% believe the housing market would fare the same or worse than it did in 2008

                                   Why all the talk about a recession recently?

Over the last year, four separate surveys have been taken asking when we can expect the next recession to occur:

  1. The Pulsenomics Survey of Market Analysts
  2. The Wall Street Journal Survey of Economists
  3. The Duke University Survey of American CFOs
  4. The National Association of Business Economics

70% of all respondents to the four surveys believe that a recession will occur in 2019 or 2020 with an additional 18% saying 2021.

However, we must realize that a recession does not mean we will experience another housing crash. According to the dictionary definition, a recession is:

“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.”

During the last recession, a dramatic fall in home values helped cause it.

However, according to research done by CoreLogic, home values weren’t negatively impacted as they were in 2008 during the previous four recessions:

Homebuyers Shouldn’t Worry About 2008 All Over Again | Keeping Current Matters

During the four recessions prior to 2008, home values depreciated only once (at a level that was less than 2%). The other three times home values appreciated, twice well above the historic norm of 3.6%.

                                                    Bottom Line

If there is an economic slowdown in our near future, there is no need for fear to set in. Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained that there’s no reason to panic right now, even if we may be headed for a recession.

“We’re seeing a cooling of the housing market, but nothing that indicates a crash.”

                              What this means for the Twin Cities Market

According to the 2019 Housing Market Outlook Report: "Homes in Minnesota are overall affordable and the outlook for housing in 2019 is strong. Experts predict we may see a general economic slowdown, but that won't happen until late 2019 or 2020. But real estate is not the protagonist. Buying a home will remain the most stable investment a buyer can make today and into the future. 

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Real Estate Industry
Tags:
real estate bubble
eden prairie real estate
stieg strand
real estate market crash
the strand group
realtorinedenprairie
mnhomreportscom
house values plummet
dropping house values

Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
376,996

Stieg Strand

Always showing up and working hard for you
I am ready to help you, just let me know how...
*
*
*
*
Spam prevention