While none of us have a crystal ball – here are some key highlights to remember:
- Many economists agree that the U.S. is entering a recession.
- The coronavirus has caused a global economic slowdown.
- But home prices don’t always drop during a recession.
- Home prices in the U.S. might just level off, instead of falling.
- Much depends on how long the 2020 recession drags on.
Many people may remember the Recession of 2008 and 2009 and the economic fallout. Unemployment skyrocketed, Businesses failed, and home prices in most of the U.S. dropped.
But Do home prices always drop during a recession?
The answer is no. It largely depends on how long the economic downturn lasts, and how severe it is. Which still remains to be seen.
- During the 1990 – 1991 recession, U.S. home prices dipped slightly and then began rising gradually again once the economy rebounded.
- During the 2001 economic recession home prices in the U.S. didn’t drop at all.
Many economists have already stated that we have entered a global economic recession. Does that mean we’ll see a drop in home prices?
“Surprisingly, that’s a hard question to answer. History does not show a direct correlation between economic downturns and home-value declines.
It’s also important to realize that local housing markets (at the city, county and state level) behave differently from one another. Some could cruise through the current crisis with little damage, while others could decline.
At this stage, we do not expect to see a major decline in home prices nationwide.
The nation’s median home price will likely slow down in the months ahead, and might level off. But a sharp decline seems unlikely based on current conditions.”
By Brandon Cornett | March 22, 2020 | © HBI, all rights reserved
Disclaimer: Economic and housing forecasts are the equivalent of an educated guess and should be treated as such. No person or organization can predict future market conditions with complete accuracy.