- Is a recession coming?
Will 2020 be a good time
to buy, sell real estate?
And, what was up with NBC show Sunnyside?
Did you see that pile of,
I, I can't, I can't.
Welcome, Episode 30 of
the RealTegrity show,
I'm Robert Swiderski,
broker owner of RealTegrity,
Real Estate with integrity and recession?
There's been lots of
talk about a recession.
Yield curve has inverted.
And if you're not sure
what that is, look it up.
But over the last 50 years,
when a yield curve inverts,
it's one of the most consistent
recession indicators.
That, coupled with the stock
market dropping 800 points
in August and bouncing
up and down ever since,
has caused a lot of talk about a recession
being closer than we thought.
So what does that mean
for the housing market?
Honestly, I'm not worried about it.
Hear me out as we compare
the 2007 market collapse
to current market conditions.
And, by the way, if
you are typically bored
by stats and graphs, but you're thinking
of buying or selling real estate in 2020,
put your ADD to the side, put it in check,
really focus for the next two minutes.
You can do it, I can do it,
we can do it, oh, shiny!
Okay, I'm putting my ADD in
check starting right now.
Interestingly enough,
home owners in the US
currently have over 6.3
billion dollars in equity
in their homes.
Only 4.1% of homeowners
have negative equity.
As you know, 4.1% is tiny.
Back in 2010, homeowners
had 25.3% negative equity.
So, as we think about recession
and how it relates to the housing market,
we need to look at factors like this.
By 2008 a lot of people were
going through foreclosure
or even just walking away from their home.
It was sad, it was
scary, it was difficult.
But now, with 6.3 billion
dollars of equity,
homeowners aren't just goin' to bail out.
Also, according to the Urban Institute
over 37% of homes don't
even have a mortgage.
During the last crash,
people were taking equity
out of their homes and
buying boats and cars
and making it rain.
They were using their
homes as an ATM machine.
But now, they're keeping their
money insides their homes.
And that's why 37% of
homes are mortgage free,
and we have 6.3 billion in equity.
The reason I feel it's
important to talk about this
is because with all they
hype of a recession,
we need to truly know what it means
regarding the housing market,
and not to let fear of what
happened in last recession
control our thoughts and emotions
about what we should or
shouldn't be doing now
and going into 2020.
As Jeff Tucker, Zillow's
Economist, states,
and this is a lot of
words, but we can do this,
"The housing crash during
the Great Recession
"left a lasting impression.
"But as we look ahead
to the next recession,
"it is important to recognize
"how unusual the conditions
were that caused the last one,
"and what's different about
the housing market today.
"Rather than an abundance of homes,
"we have a shortage of new home supply.
"Rather than risky borrowers
"taking on adjustable rate mortgages,
"we have buyers with
sterling credit scores
"taking out predictable
30-year fixed-rate mortgages.
"The housing market is
simply much less risky
"than it was 15 years ago."
That bottom is that we are
in a totally different time,
and a lot of the factors
that were in play in 2008
are simply not in play now.
Compared to how easy it was
to get a loan 10 or 15 years ago,
and the types of loans that
were available back then,
things are totally different now.
So let's not make this something it isn't.
It's important we know the facts,
as many times the media is
not telling us everything
and they love to get those
negative headlines out there
because they sell more.
So if you're thinking of
buying or selling in 2020,
go for it.
That's it for Episode 30 and thanks a lot.
There's a lot more
content coming your way.
If you found this to be helpful,
please share and subscribe.
Feel free to reach out to me directly
for any and all of your real estate needs.
Until next time, be well.
