If you need assistance, please call 702-476-0060

Recession? Yes. Housing Crash? No.

Wednesday, April 15, 2020   /   by Ken Couture

Recession? Yes. Housing Crash? No.

With over 90% of Americans now under a shelter-in-place order, many experts are warning that the American economy is heading toward a recession, if it’s not in one already. What does that mean to the residential real estate market?


What is a recession?


According to the National Bureau of Economic Research:


“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”


COVID-19 hit the pause button on the American economy in the middle of March. Goldman Sachs, JP Morgan, and Morgan Stanley are all calling for a deep dive in the economy in the second quarter of this year. Though we may not yet be in a recession by the technical definition of the word today, most believe history will show we were in one from April to June.


Does that mean we’re headed for another housing crash?


Many fear a recession will mean a repeat of the housing crash that occurred during the Great Recession of 2006-2008. The past, however, shows us that most recessions do not adversely impact home values. Doug Brien, CEO of Mynd Property Management, explains:

Home Price Change Recessions.jpg

“With the exception of two recessions, the Great Recession from 2007-2009, & the Gulf War recession from 1990-1991, no other recessions have impacted the U.S. housing market, according to Freddie Mac Home Price Index data collected from 1975 to 2018.”


CoreLogic, in a second study of the last five recessions, found the same. Here’s a graph of their findings:


What are the experts saying this time?


This is what three economic leaders are saying about the housing connection to this recession:


Robert Dietz, Chief Economist with NAHB


“The housing sector enters this recession underbuilt rather than overbuilt…That means as the economy rebounds – which it will at some stage – housing is set to help lead the way out.”


Ali Wolf, Chief Economist with Meyers Research


“Last time housing led the recession…This time it’s poised to bring us out. This is the Great Recession for leisure, hospitality, trade and transportation in that this recession will feel as bad as the Great Recession did to housing.”


Also, revealed that his firm’s research concluded that recessions caused by a pandemic usually do not significantly impact home values:


“Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices).”


If we’re not in a recession yet, we’re about to be in one. This time, however, housing will be the sector that leads the economic recovery.

For more info, visit us on:

www.CoutureRealtyLV.com

Follow us on: 

FB: Ken Couture Realty Your Home Sold Guaranteed

IG: @kencouturerealtylv

Twitter: @kencouture

Contact us at:

Ken@CoutureRealtyLV.com

702-476-0060

#KenCoutureRealty

#KenCouture

#KenCoutureYourHomeSoldGuaranteed

#LasVegas

#HomeForSale

#RealEstate

Couture Realty
Ken Couture
8367 W Flamingo Rd Suite 101
Las Vegas, NV 89147
702-476-0060

UP5DB701E1507748.jpgThe data relating to real estate for sale on this web site comes in part from the INTERNET DATA EXCHANGE Program of the Greater Las Vegas Association of REALTORS® MLS. Real estate listings held by brokerage firms other than this site owner are marked with the IDX logo. The information being provided is for the consumers' personal, noncommercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. GLVAR MLS deems information reliable but not guaranteed. Copyright 2021 of the Greater Las Vegas Association of REALTORS® MLS. All rights reserved.
This site powered by CINC: www.cincpro.com