Let's Talk About the "R Word" - Recession
We recently shared a cool infographic with you about what's happening with the economy and mortgage rates here in the United States.
The week of August 12, 2019 was a crazy one in the equity markets and you may have seen some scary headlines out there like these:
From CNBC: "Dow tanks 800 points in worst day of 2019"
From Fox: "Recession coming? What economists think"
From NPR: "What economic indicators are telling us about a potential recession"
It's easy to be overwhelmed by headlines like these. But they don't tell the whole truth as it relates to the real estate market. So, what is the truth?
We're currently in the longest economic recovery in American History. Recoveries end when there's an economic slowdown, which is defined as two or more consecutive quarters where the GDP (gross domestic product) slips. This is also known as a recession.
We want to make one thing VERY clear:
A recession is NOT a housing crisis.
In fact, in the last 5 recessions only 2 had a negative impact on home prices. The most impactful recession in 2008 was actually caused by the housing and mortgage markets so it's natural that home prices and values were affected.
But in the other 3 recessions, home prices actually rose because the recessions had no connection to the housing market.
This is the type of potential recession experts are predicting we'll experience - one that's more closely associated with trade wars and a bumpy geopolitical climate.
What does that mean for you? In short, do not let scary headlines like the ones listed above and any mention of the "R Word" lead you to believe we are headed for a housing crisis. Remember - a recession is NOT a housing crisis!
If you've been on the fence about buying or selling, let us make clear that now is a great time to do either! The market is opportunistic and interest rates are at an all-time low. In DFW there are currently 33,000 homes for sale and somewhere between 10,000-12,000 homes sell each month. And DFW just experienced an even better July than in 2018!
We understand if the recent volatility of the stock market makes you feel a tad nervous. Which is why you should consider investing in the safest market there is - real estate.
Moral of the story is, I'm not saying there isn't a slowdown in our future. But I'm also not worried about home prices and values here in DFW. Especially not when there are still nearly 600 people moving to our area every day.
In my 25 years of selling real estate, I've lived and worked through a few recessions. And based on current conditions and market forecasts, I can confidently say the next recession will not at all look like the one from 2008. What we should anticipate is more of a "market correction."
One thing I always say is, "In any market people need to move. People graduate, get married, retire, and take job transfers. They upsize and downsize in every economy."
So, take comfort in the fact that we at Jay Marks Real Estate know what we're doing in any economy. If you have questions/concerns about what effects the current and future markets will have on your real estate, let's talk! It doesn't have to be a scary conversation - we promise!
We know what to do.