Let’s quickly look at 3 reasons we’re not in a housing crisis –
1. The Market Today Is Vastly Different from 2008
The housing market entering this slowdown was incredibly robust. All key indicators that display market health – market appreciation, homeowner equity, default rate, etc – are very healthy. We reviewed this in last week’s video.
2. A Recession Does Not Equal a Housing Crisis
Excluding the financial crisis of 2008 (which was largely driven by an unhealthy housing market), 3 of the last 4 recessions have led to home appreciation and the other only saw a 1.9% decrease in prices.
3. We Can Be Confident About What We Know
The current challenges we are facing are very serious. We have voluntarily shut down large portions of the economy and have forced millions to stay at home in an effort to slow down and stop the spread of a very lethal virus. The economic issues we’re facing are not a systemic crash but rather a byproduct of an economic pause. Housing going into this was one of the strongest sectors of the economy and regardless of temporary slowdowns, it will emerge one of the strongest.