JHT Market Update - EP 08
What does the 2020 Recession mean for the housing market?
On Monday, the National Bureau of Economic Research announced that the U.S Economy has entered into a recession.
Naturally, recession headlines are taking consumers back to the dramatic impact the 2008 Recession had on the housing market, and many expect the same downturn to follow suit. However, what hindered the Great Recession was irresponsible lending, driving homeowners into foreclosures.
The real estate market is now in a totally different place than it was. Especially considering today majority of homeowners in forbearance plans have 20% or more equity on their homes, which creates a cushion to prevent abundance of foreclosures in the future. (1)
Other major differences in today’s real estate market include; shortage of inventory, irresponsible lending no longer exists, and home price appreciation is not out of control.
All in all, a recession does not equal a housing recession. Especially considering home values actually increased in three out of the four previous recessions prior to 2008.
To the current market overview of the areas of Fullerton, Cypress & La Mirada over the past 7 days shows there are 40 new listings on the market, 41 new contracts and 28 sales.
Stay tuned for our weekly market update coming your way every Friday!