The National Bureau of Economic Research officially announced that we’re in a recession, but that doesn’t mean what most people think.
According to the NBER, a recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators.
The pandemic’s effects on businesses across the country have understandably led to slowed economic activity, but we’re already seeing signs projections of a recovery in the second half.
Moreover, a recent Wall Street Journal report found that more than 9 out of 10 economists surveyed believe the recovery has already begun this quarter or will begin in the third quarter of this year.
But the fear that’s holding many potential buyers and sellers back from moving forward with their initial plans is very real: they also think a housing crash will follow.
Mark Fleming, chief economist at First American, explained, “Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path.”
More experts have echoed Fleming’s thoughts on housing, stating that the real estate market will most likely play the opposite role of what it did for the Great Recession. This time, it will help stimulate the economy and bring us out of a decline faster.
While buying or selling a home provides both personal satisfaction and financial benefits, it’s equally important to let your clients know that it’s an economic stimulator too.
The market conditions that led to the housing collapse– overbuilt stock and risky mortgages- are the exact opposite of what we’re seeing today. Low-inventory and stricter lending practices have set real estate up to remain strong, despite our country’s economic fragility.