More and more we hear talk in the news about an upcoming recession. The "R" word is creating insecurity, and clients are increasingly asking my opinion on where the market is headed and what is to come.
I'm not an economist people! I'm a Realtor! Even if I were an economist, most of them don't have a stellar track record on forecasting a market down-turn. I don't have any economic insider knowledge. I don't know if prices will remain the same, and don't know when they will go down. If I could predict the future, I could be making much more money outside of real estate. What I can show my clients are the current and past housing market statistics for our area. They will show a trendline that may continue in the same path, or may turn at any moment.
This is how the market in our neck of the woods has behaved over the recent years.
How do we know when the market has reached its peak?
Once it goes down.
While I can't be helpful in telling you ahead of time when the market will take a turn, I'll gladly share my insights into what I've learned the last time our housing market took a hit. A recession means higher unemployment rates, contracting income, lower housing prices, and resulting higher numbers of foreclosures. My advice to consumers, worried about a recession is this:
-Work on eliminating debt.
-Pay down high interest rate debt first.
-Save for a financial cushion.
-Live below your means.
Economies expand, and subsequently must contract. What goes up, must come down.
After the scary "R" of Recession will eventually follow the "R" of Recovery.
Olympia Realtor®, GRI, ASP, SRES, SFR, VAMRES