Are we going to a recession?

Here is a question that keeps coming up and we keep getting asked. The question is Are We going into a recession?  It’s important to remember, a recession does not equal a housing crisis.  According to Doug Brien, CEO of Mynd Property Management he stated, “With the exception of two recessions the Great Recession from 2007-2009 & the Gulf War recession from 1990-1991, no other recessions have impacted the U.S. housing market, according to Freddie Fac Home Price Index data collected from 1975 to 2018.”  Here is an example of a graph from information from CoreLogic that shows just that.  Obviously, the last crash on the housing market in 2008 saw a devastating decrease in home prices because of what was happening back in 2008.  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 without proving it, and therefore often weren’t truthful and couldn’t afford the payments, so we had major defaults.  Also, back then homes from one month to the next were appraising for twenty, thirty, or even as high as over one hundred thousand dollars more than the previous home being sold.  That does not make sense and should never have happened, and we have to understand that 2008 is much different than what is happening now.  According to David Rosenberg, Chief Economist of Gluskin Sheff + Associates Inc. States, “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 then as they believed another terrorist attack was coming and are acting the same today to avoid getting sick.  The same parts of the economy are under pressure- airlines, leisure, hospitality, restaurants, entertainment- Consumer discretionary services in general.”  It’s as though all of those services are on pause so our economy has been put on pause as people are sheltering in place. So if we compare this to 9/11 and Crash we see the S&P 500 dropping drastically from Sept of 2000 until October of 2002, however at the same time we see an increase in Annual Home Price Appreciation ranging from 6.6% to 8.6%.  Obviously this is very different from what we saw in 2008.  Hey, I’m  not giving my opinion, I’m just stating what experts are saying and I thought it could be of service to you.  Feel free to reach out to me here at Homes by Krista with any questions or concerns, we are always here to help.