- One common question we
keep getting right now
is are we going into a recession?
It's important to
remember that a recession
does not mean a housing crisis.
According to Doug Brien, CO
of Mynd Property Management,
with the exception of two recessions,
The Great Recession from 2007 to 2009
and the Gulf War from 1990 to 1991,
no other recessions have
impacted the U.S. housing market,
according to the Freddie
Mac Home Index data,
from 1975 to 2018.
Obviously, the housing crash of 2008,
saw a devastating impact
on the housing market.
In 2008, loans that were rated as D loans
were being sold as A loans.
Also back then we had stated income loans
where people could just
state what they made
and they didn't have to prove anything.
Thus, they were approved for loans
for more than they could afford.
Also back then we had
homes that were appraising
for $20,000, $30,000, even $100,000
more from one month to the next.
That does not make sense and
it should've never happened.
We have to understand
that what is happening now
is very different than what happened
to the housing market in 2008.
According David Rosenberg, Chief Economist
for Gulskin and Associates,
"What 9/11 has in common
with what is happening today
"is that the shock has
also generated fear,
"angst, and anxiety
among the general public.
"People avoided crowds as they believed
"another terrorist attack was coming
"and they are doing the same
today as they avoid crowds
"to avoid getting sick."
The same parts of the
economy are under pressure,
airlines, leisure,
hospitality, restaurants,
and entertainment, consumer
discretionary services.
It's as though all those
services are put on pause,
as our economy is put on pause,
as people shelter in place.
So, if we compare this to
9/11 and the Dot-com crash,
we see the S&P 500 dropping drastically
from September 2000 until October of 2002.
However, at the same
time we see an increase
in annual home prices appreciation
ranging from 6.6 to 8.6.
Obviously, this is very different
than what we saw in 2008.
Hey, I'm not giving my opinion.
I'm just saying what
experts have been saying
to be of service to you.
I'm Chelsea Cook with Harcourts Realty
and I'm the key to sold.
