December National Market Update 1 - Are we in for a crash?

Lately it seems you can’t turn on the television or go on the internet, without hearing or reading the word “recession”.  It seems to be the latest buzz word with economists.  Hi, I’m Krista Mashore with Homes by Krista and eXp Realty.  Probably the question I am most asked these days is “If we are in a recession will the housing market crash again like 2008? So, let’s break it down.Since the 2008 housing bubble burst, the word recession has a stronger emotional meaning today when it comes to housing as most buyers and sellers do not want to see a repeat of the financial housing crisis of 2008.  According to the experts, if we are officially in a recession today, it would likely be more mild and the housing market should rebound quickly unlike 2008. According to Ali Wolk, chief economist at Zonda, “Housing is traditionally one of the first sectors to slow as the economy shifts but is also one of the first to rebound”. So, how is today’s housing market different from the market crash of 2008? Unlike the 2008 crash, experts do not predict the widespread unemployment with homeowners unable to pay their mortgages therefore causing foreclosures and shortsales.  Also, lenders have learned from the past and put in place new lending guidelines where only buyers with a consistent and verifiable income can qualify for a mortgage. More importantly, current data is showing Millennial housing demand will keep the market from crashing.  Millennial demographics want more housing and creating demand.   According to the National Association of Realtors, first time buyers under the age 40 were responsible for 30% of sales this year, keeping housing in high demand even with the slow down and lower inventories. A crash happens when there is an oversupply of inventory and that just isn’t the case right now due to the lower inventory.Bottomline, if we are moving into a recession the housing market will see some corrections but most experts predict we will not see the housing crash of 2008. As always, if you need more information on the market and are considering selling or buying, please reach out to me and my team to connect.