Leave a Message

Thank you for your message. We will be in touch with you shortly.

The One Thing Every Homeowner Needs To Know About a Recession

The One Thing Every Homeowner Needs To Know About a Recession
A recession does not equal a housing crisis. That’s the one thing that every homeowner today needs to know. Everywhere you look, experts are warning we could be heading toward a recession, and if true, an economic slowdown doesn’t mean homes will lose value.
 
The National Bureau of Economic Research (NBER) defines a recession this way:
 
“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”
 
To help show that home prices don’t fall every time there’s a recession, take a look at the historical data. There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, home prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean home values will fall or depreciate.
 
The One Thing Every Homeowner Needs To Know About a Recession | MyKCM
 
The first occasion on the graph when home values depreciated was in the early 1990s when home prices dropped by less than 2%. It happened again during the housing crisis in 2008 when home values declined by almost 20%. Most people vividly remember the housing crisis in 2008 and think if we were to fall into a recession that we’d repeat what happened then. But this housing market isn’t a bubble that’s about to burst. The fundamentals are very different today than they were in 2008. So, we shouldn’t assume we’re heading down the same path.
 
Bottom Line
 
We’re not in a recession in this country, but if one is coming, it doesn’t mean homes will lose value. History proves a recession doesn’t equal a housing crisis.

Recent Blog Posts

Stay up to date on the latest real estate trends.

3 Reasons To Buy a Home Before Spring

You might even be thinking, “Should I just wait until spring when more homes hit the market and rates might be lower?” But here’s the thing, no one knows for sure whe… Read more

SF Market Update - January 2025

The Federal Reserve’s interest rate cuts in 2024 provided some relief to some borrowers, but mortgage rates have remained stubbornly high. As of January 2, 2025, the a… Read more

East Bay Market Update - January 2025

The 2024 housing market looked progressively healthier with each passing month until Q4. The promising build in inventory during the first nine months of the year was … Read more

Expert Forecasts for the 2025 Housing Market

Experts are forecasting rates could settle in the mid-to-low 6% range by the end of the year.

San Francisco Market Update - December 2024

Elevated mortgage rates dominated the housing market in 2024, and 2025 may look similar if inflation starts to ramp up again.

East Bay Market Update - December 2024

Median home prices rose slightly in November, which is normal for the East Bay this time of year.

Control the Controllables If You’re Worried About Mortgage Rates

While you may be tempted to wait for rates to fall, it’s really hard to try and time the market — there’s just too much that can have an impact. Instead, set yourself … Read more

SF Market Update - November 2024

The median single-family home price rose 7.7% month over month, while condo prices increased 9.2%. We expect prices to contract over the next three months, which is th… Read more

East Bay Market Update - November 2024

Months of Supply Inventory still indicates a sellers’ market in the East Bay for single-family homes, but for condos, MSI implies the market now favors buyers.

Let’s Talk

You’ve got questions and we can’t wait to answer them.