Should We Worry About 2008 All Over Again

Dated: May 10 2019

Views: 193

Image title


Last week, realtor.com released a survey of active home shoppers (those who plan to purchase their next home in 1 year or less). The survey asked their opinion on an impending recession and its possible impact on the housing market.

Two major takeaways from the survey:

  • 42% believe a recession will occur this year or next (another 16% said 2021)

  • 59% believe the housing market would fare the same or worse than it did in 2008

Why all the talk about a recession recently?

Over the last year, four separate surveys have been taken asking when we can expect the next recession to occur:

  1. The Pulsenomics Survey of Market Analysts

  2. The Wall Street Journal Survey of Economists

  3. The Duke University Survey of American CFOs

  4. The National Association of Business Economics

70% of all respondents to the four surveys believe that a recession will occur in 2019 or 2020 with an additional 18% saying 2021.

However, we must realize that a recession does not mean we will experience another housing crash. According to the dictionary definition, a recession is:

“A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.”

During the last recession, a dramatic fall in home values helped cause it.

However, according to research done by CoreLogic, home values weren’t negatively impacted as they were in 2008 during the previous four recessions:

Image title

During the four recessions prior to 2008, home values depreciated only once (at a level that was less than 2%). The other three times home values appreciated, twice well above the historic norm of 3.6%.

Bottom Line

If there is an economic slowdown in our near future, there is no need for fear to set in. Most experts agree with Ralph McLaughlin, CoreLogic’s Deputy Chief Economist, who recently explained that there’s no reason to panic right now, even if we may be headed for a recession.

“We’re seeing a cooling of the housing market, but nothing that indicates a crash.”


Latest Blog Posts

4 Major Reasons Households In Forbearance Wont Lose Their Homes To Foreclosure

There has been a lot of discussion as to what will happen once the 2.3 million households currently in forbearance no longer have the protection of the program. Some assume there could potentially

Read More

Why This Is A Great Year To Sell Your Vacation Home

As vaccines are administered and travel resumes, many of us are beginning to plan for those long-awaited vacations we missed out on over the past year. Some households are focusing their efforts on

Read More

Latest Jobs Report What Does It Mean For You The Housing Market

Last Friday, the Bureau of Labor Statistics released a very encouraging jobs report. The economy gained 916,000 jobs in March – well above expert projections of 650,000 to 675,000.

Read More

Why You Should Think About Listing Prices Like An Auctions Reserve Price

For generations, the homebuying process never really changed. The seller would try to estimate the market value of the home and tack on a little extra to give themselves some negotiating room. That

Read More