Many economists are predicting a recession. In this video, we will look at what a recession could mean for the real estate market, especially home values and mortgage rates.
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Eric Andersen, B.A., M.Div.
Owner/Designated Managing Broker, Eric Andersen Homes
📲 Text/Call: 708.674.6725
📩 Email: eric@eandersenhomes.com
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I have a number of awards and designations, including:
⭐️ Platinum 2021 Top 1% Sales Award (Mainstreet Organization of REALTORS®)
⭐️ Top 3 REALTOR® in Brookfield, IL (2021)
⭐️ 20 under 40, class of 2021 (Mainstreet Organization of REALTORS®)
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Transcript:
Almost half of economists are predicting a recession in the next twelve months. In this video, we will look at what a recession could mean for the real estate market, and if it makes sense for you to delay purchasing a home if a recession is on the way. Since 1980, we have seen six recessions. During that time, we saw home values continued to grow during four of those recessions. This means that the odds are home values will continue to rise even when the economy slows down. What’s interesting to note is that during the recession of 1991, home values declined by less than two percent, so the impact was very minimal. And, of course, in 2008, home values dropped by nearly twenty percent, but the entire market crashed at that time and it was actually the housing market that caused the recession, so that’s an outlier.What does a recession mean? Usually, falling interest rates. As Fortune said, “Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. And in many cases, they continued to fall after the fact as it takes some time to turn things around even when the recession is technically over.”Of course, history is not guaranteed to repeat itself, but we can see some clear patterns, and they suggest that a recession will mean higher home values and lower interest rates. The bottom line is we don’t know the future, so the most important thing to consider about moving is whether or not it’s the right time for you. If it is, you can find all of my contact information below, and I would love to hear from you. I’m Eric with Eric Andersen Homes, a family-owned brokerage where we treat our clients like family.