Experts say a recession is looming in 2020, but unlike back in 2008, this one shouldn’t stop you from buying or selling a home.
The party we’ve been having over the past several years might be coming to an end.
The economy is soaring, but a recent Wall Street Journal poll of 73 economists found that the majority believe a recession is coming in 2020. Active homebuyers echo these predictions, with 70% expecting a downturn to happen next year.
It’s not just opinion, either. There are signs that home price growth is slowing nationwide, and in some areas, prices are even going down. Homes sales are down nationwide, as well.
Granted, none of this is true in the Triangle—more homes are selling this year than last year (with the exception of Chapel Hill). However, I personally do not believe that this recession will be anything like what we saw in 2008, and there are two reasons why:
First, there’s no housing bubble. In 2006 and 2007, a lot of people who weren’t qualified to buy a home were still getting subprime mortgages. That’s what was driving prices, and it was just a matter of time before they weren’t able to pay those mortgages. While home prices are at record highs right now, this is a reflection of the lack of supply rather than speculation.
Second, housing prices have not historically been affected very much by a recession. 2008 was the obvious exception to this rule, but in 2020, we should revert back to the norm.
In my opinion, great homes will still sell quickly in 2020 and beyond. On the other hand, homes that need a little work will have a harder time selling than they do now. If you have a home that’s a little bit quirky or needs some work, you should consider selling to an iBuyer in 2020.
In other words, we might see some corrections, but the fundamentals will remain the same. And that’s why, if you plan on buying or selling a home soon, think of your own needs first before thinking about any recession.
If you’d like to know what your home is worth or you have any other real estate questions, don’t hesitate to reach out to me. I’d be happy to help you.