Recession Coming? Impact on Real Estate?
This article authored by: Rob Hallberg
Over the past few months there have been articles in the news suggesting a pending recession. But how soon or realistic are these articles?
According to the National Association for Business Economics, only 2% of survey respondents predicted a recession this year. 38% predicted one in 2020, 25% in 2021 and 14% in 2022 or later. So economists are roughly split in the middle as to a recession occurring in the next 12 months or in a year or more.
Interest rates are still very low for home mortgages and may drop even further, so it is a good time for Buyers to take advantage of that. But if there is a recession, won’t home values plummet as they did in 2008? Most economists do not think so.
George Ratiu, a senior economist with the National Association of REALTORS® believes home prices could flatten in a recession but they likely won’t drop. The current shortage of homes for sale and the low rate of new construction will likely cushion any slowdown in the market.
So keep an open mind, and if you have a financial advisor, check with them before making a decision on a home purchase.
Rob and Catherine Hallberg are Associate Brokers with Long Realty, a Berkshire-Hathaway Affiliate and Southern Arizona’s largest Brokerage. Send Rob and Catherine an email for a fast response to your questions; for an even faster response, Call (520) 407-8667 or Text (520) 203-2031.