Last week released the results of a survey that produced three major revelations:
1. 53% of home purchasers (first-time and repeat buyers) currently in the market believe a recession will occur this year or next.
2. 57% believe the next recession will be as bad or worse than 2008.
3. 55% said they would cancel plans to move if a recession occurred.
Since we are currently experiencing the longest-ever economic expansion in American history, there is reason to believe a recession could occur in the not-too-distant future. And, it does make sense that buyers and sellers remember the horrors of 2008 when they hear the word “recession.”
Ali Wolf, at the real estate consulting firm , addressed this point in a recent interview:
Most experts, however, believe if there is a recession, it . This housing market is in no way the same as it was just over a decade ago.
In the past 23 years, there have been two national recessions – the dot-com crash in 2001 and the Great Recession in 2008. It is true that home values fell 19.7% during the 2008 recession, which was caused by a mortgage meltdown that heavily impacted the housing market. However, while stock prices fell almost 25% in 2001, home values . The triggers of the next recession will more closely mirror those from 2001 – not those from 2008.
No one can accurately predict when the next recession will occur but expecting one could possibly take place in the next 18-24 months is understandable. It is, however, important to realize that the impact of a recession on the housing market will in no way resemble 2008.