Here’s what you need to know about the recession and home prices.
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Did you know that during most recessions, home prices tend to rise? When the Federal Reserve increases rates, that drives the economy into a recession. The exception is the Great Recession of 2008, which was caused by the housing market. The economy is already showing signs that we’re currently in recession, but this one was caused by the Fed over-printing money and flooding the world market with it.
So what does the recession mean for the housing market? For one, we can expect home prices to level off or even dip within the next couple of years. The Fed will eventually correct interest rates, which will ultimately spur another buying boom when buyers return to the market to take advantage of lower rates.
"The economy is already showing signs that we’re currently in recession."
That said, we’re not heading for a housing crash like many people believe. Current homeowners have anywhere between 30% and 60% equity in their homes, meaning they don’t need to sell. Even if you lose your job, you can always sell your home in 30 to 60 days and use the equity to downsize to a smaller, more affordable home.
We are still in a strong seller’s market, though it is becoming more normalized. If you have any questions about current market conditions or want to buy or sell a home, give me a call or send me an email. I’d love to help you.