Is a Recession Headed Our Way in 2020?

Is a Recession Headed Our Way in 2020?

How likely is a recession in 2020? This is the question of the hour. It’s on everyone’s mind. Hi, Christy Benitez, Sales Agent at Benitez Real Estate. We need to remember that next year is a presidential election year, and probably one of the most controversial elections yet. There’s going to be a lot of questioning and political debates about the economy: why is it so good, and questioning if our economy is going to decline, so this can stir up a lot of hype. There have been four major surveys this year asking experts if they believe we are going to see a recession. 67% do believe that we should see a recession by 2020. Pulsenomics surveyed analysts, and 59% believe that we will see a recession by 2020. Why do we think this is? We’ve been in the longest recovery in American history, so we should expect to see a slowdown. The GDP will slow down, but let’s look up the Webster’s Dictionary’s definition of a recession. A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP, gross domestic product, in two successive quarters. We need to remember that recession does not mean housing crisis. In three of the last five recessions, housing prices actually increased during the recession. Obviously, 2008 was the most drastic. Now, on the same survey from Pulsenomics that asked if they anticipated a recession, they also asked in the same day at the same time, the same exact survey, the same analysts, what they thought would trigger the recession. The number one answer was trade policy. Number two was stock market conditions, and number three was a geological crisis. Number nine on their list of triggers was housing slow down. In 2008, our largest decline in appreciation, was because of a housing slowdown and the situation in the mortgage industry. This year, we’re not even in the top eight! Also, in the same survey on the same day, they asked what about the median appreciation of housing. All the analysts said that the housing prices are going to go up, not down. Appreciation is going to slow down, but the prices are still going to be going up anywhere from about 2.5% to 4.1% through 2023. Why is this important to know? We don’t want to get in a panic about buying and selling and become afraid that it will be like 2008. In fact, Morgan Housel, a well-renowned financial analyst said an interesting thing is that the widespread assumption is that the next recession will be as bad as 2008. Natural to think that way, but statistically, highly unlikely. Could be over before you even realized it began. So that’s what he thinks. Prices and appreciation are expected to just be more normalized. Don’t let all the hype about a recession scare you from the dream and benefits of home ownership. In my opinion, it’s one of the very best investments that you can make. According to Mark Fleming, First American’s Chief Economist, he says, “If the 30-year, fixed-rate mortgage “declines just a fraction more, “consumer house-buying power would reach “its highest level in almost 20 years.” So what does this tell us? It tell us don’t be so caught up with all the hype. Make the move, and as always, if you have any questions at all, please feel free to reach out to us. And remember…happy homes start right here…

Connect With Us!

If you're looking to buy or sell a property connect with us today!

How Can We Help You?

We would love to hear from you! Please fill out this form and we will get in touch with you shortly.
    (check all that apply)
  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published. Required fields are marked *