Will the Housing Market Survive the Next Economic Slowdown?

Will the Housing Market Survive the Next Economic Slowdown? When will the next recession start? What will cause the next recession? And will the recession affect home prices? Watch this video to find out!

Transcription:

Hey it’s David Pestana Broker owner with Rise Realty. Today I want to talk about that next recession. And so I have a couple questions that we want to address which is. When will the next recession start. What will cause the next recession. And will the recession affect home prices. All right thanks for watching this episode about the recession while you’re watching. I know everyone’s going to have an opinion so please share your opinion in the comments. And like it or dislike it let me know what you think. This is kind of a hot topic today. Just to make sure that we’re all on the same page. Let’s define what a recession is. A recession is a period of temporary economic decline during which trade industry actively are reduced generally identify a fall in gross domestic product in two successive quarters. So generally if we have about six months of a declining market we’re technically in a recession. Everybody wants to know when the next recession will be. Obviously it’s kind of a hot topic as we’ve been in a hot market for a long time. So people are anticipating a slowdown. I put together a graphic. And it’s it’s a survey from the Wall Street Journal and pulse economics of economists Real Estate Professionals financial advisors on when the next economic crash is going to happen. So in this graph that I’m showing you all these economists were asked when will the next U.S. recession begin and the highest percent of them agreed that the recession would begin in 2020 much fewer of them thought that 2019 next year would be at or 2021. So by far most people think that the next recession will begin in. 2020. So the next question is what will cause the next recession and these same economists were surveyed and this is what they said. The top three triggers for the next recession could be monetary policy trade policy and stock market correction. The big difference between this future potential recession and our last one or last one we had a huge credit bubble so really was initiated by a lot of banking fraud and excessive lending that was going on. This time around. They said well what would housing be the cause of the next recession. And that was number nine that we would get some sort of housing market crisis would cause it. So by far most people don’t think it’s really going to be housing at all that causes it’s going to be other things other economic things that will cause it. The last question is how will this projected recession affect our housing values. That’s what everyone really wants to know if we’re going to buy a house today. We want to know if we’re going to lose a lot of value in it. We’d rather buy a house and gain it right. So it is. I produced a graph from from these surveys and this is what we find out they’re projecting all positive growth. You know this year these are national numbers by the way. So this year we’re looking at about five point eight percent. We’re told locally in our Utah county area we had over 11 percent appreciation now in 2019. It is going to slow down. There’s no doubt per slowdown that’s happening. The number one reason for that is higher interest rates. Those interest rates are absorbing a lot of our value because they’re making our payments higher. But 2020 when the recession is supposedly going to start they still show up three point one percent appreciation home values and they do that 20 21 22 22. OK. So those are pretty good. And what they’re saying is that the fundamentals of the housing market are so strong that they don’t really see housing crashing this time around. So in summary there are three takeaways from this. OK. One is a recession doesn’t always equal a housing market crash. Home values are not going to depreciate. And 3 all real estate is local and now Utah being very local. We have so many strong fundamentals of growth good jobs and opportunities here that will continue to have that supply demand curve push push our values. OK. So as you’re looking to buy you know expect that housing isn’t going to crash. It’s still a great time to get in now as interest rates are lower. Thanks for watching this episode. I really honestly want to know what you think and I’m sure a lot of you think this is all a bunch of baloney. OK. Tell me in the comments below. And more importantly tell me why and maybe reference something for all of us to learn if you like it though like indefinitely subscribe. Share this with your realtor. Share this with your friends and keep it going. OK. Thanks for watching. If you have any real estate needs here in Utah. We’re here to help.