A recession does not equal a housing crisis. That’s the one thing that every homeowner today needs to know. Everywhere you look, experts have been warning we have been heading toward a recession. However, an economic slowdown doesn’t mean homes will lose value.

The National Bureau of Economic Research (NBER) defines a recession this way:

“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”

To help show that home prices don’t fall every time there’s a recession, take a look at the historical data.

There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, home prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean home values will fall or depreciate.

 

 

 

Friends, the first occasion on the graph when home values depreciated was in the early 1990s when home prices dropped by less than 2%. It happened again during the housing crisis in 2008 when home values declined by almost 20%.

Most people vividly remember the housing crisis in 2008 and think if we were to fall into a recession that we’d repeat what happened then. But this housing market isn’t a bubble that’s about to burst. The fundamentals are very different today than they were in 2008. So, we shouldn’t assume we’re heading down the same path.

Huntsville and The North Alabama area has shown signs the last couple of months of a slow down in the frenzy of bidding wars and we have had an increase in inventory. Quality homes are still desirable by qualified home – buyers that are still on a search.  The June real estate market stats showed our local Real Estate Market is still thriving.

If you are concerned about our local area, feel free to reach out to chat more about your options, extra market facts and what would be your best move now.

What’s  The Bottom Line?

Friends, no matter how imminent a recession is, or when will it be official. This doesn’t mean homes will lose value. History proves a recession doesn’t equal a housing crisis.

We must prepare yes, we should not run in fear but we must make wise decisions in our spending as we have said before. The housing market may be impacted but at least in our Madison and Limestone County Alabama, we are still thriving.

Let’s connect today if we have not yet. We would love to discuss more about your options as a Buyer or Seller.  We have a few free guides you may consider getting and our phones are always available to call.

Remember, The Brooks Family Of Realtors has been serving the North Alabama and Tennessee Valley families since 1972.