20 Mar The Housing Market Now
It’s difficult to determine what the future holds for us during these times, but as more people begin to discuss recession, we wanted to take a moment to highlight some of the differences between the housing market now versus the housing market in 2008. As a nation, we learned a great deal and have taken a lot of necessary precautions to prevent a fall of that nature. Let’s take a look and see what are some key things to remember.
Recession and Housing Markets
Since 1980, there have been five recessions, giving us ample data on how a recession could impact the housing sector. In three of them, home values appreciated on average by 5.4%. 2008 offered a cluster of particular circumstances that lead to deprecation, but now there are several mechanisms in place to prevent something of that scale.
The Current Market vs 2008 Market
In the 2008 market, mortgages were easy to get, home prices were rapidly appreciating, there was a surplus of inventory, and excessive equity-tapping. Currently, the housing supply is very low, banks have tightened the lending process to create more safety in the sector, and there aren’t many households that are overleveraged. In housing, this is a relatively secure place to be.
People Are Still Looking At Homes
Whatever the current climate, the reasons we move are still happening. Job changes, children, marriage, and more are still going on, and our housing needs will change to accommodate these new seasons of life. At Idea Associates, many of our clients are still continuing to see steady traffic and new leads despite the economic uncertainty.
None of us have a crystal ball about what the results of the pandemic will be on housing. But if you find yourself wondering about the state of the housing market today and are thinking back to 2008, rest assured that now is a different circumstance. Interested to hear more of our thoughts? Feel free to reach out to us here!