BOBBY FREEMAN: Is a Recession Here? Yes. Does that Mean a Housing Crash? No.
By Bobby Freeman, Realtor // June 16, 2020
National Bureau of Economic Research announced U.S. economy is officially in recession
BREVARD COUNTY, FLORIDA – Recently the National Bureau of Economic Research announced that the U.S. economy is officially in a recession.
This did not come as a surprise to many, as the Bureau 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.
Everyone realizes that the pandemic shut down the country earlier this year, causing a “significant decline in economic activity.
Though not surprising, headlines announcing the country is in a recession will cause consumers to remember the devastating impact the last recession had on the housing market just over a decade ago.
The real estate market, however, is in a totally different position than it was then.
“Many of us remember the housing crash that lead to the recession in 2008-2009,” said Jennifer McCoy, Broker/Owner of McCoy-Freeman Real Estate serving all of Florida’s Space Coast.
“The real estate market was much different back then compared to today. Even though the housing market led into the recession in 2008, this time it may help bring us out of it.”
Four major differences in today’s real estate market are:
■ Families have large sums of equity in their homes
■ We have a shortage of housing inventory, not an overabundance
■ Irresponsible lending no longer exists
■ Home price appreciation is not out of control
We must also realize that a recession does not mean a housing crash is will follow.
In three of the four previous recessions prior to 2008, home values increased. In the other one, home prices depreciated by only 1.9 percent.
Bottom Line: Yes, we are now officially in a recession. However, unlike 2008, this time the housing industry is in much better shape to weather the storm.
ABOUT THE AUTHOR
Bobby Freeman, a lifetime resident of Brevard County, has been a top Realtor in the area for over two decades. In his first year as an agent, Freeman received a Rising Star award from his Brokers. Since then he has achieved numerous sales awards from some of the largest real estate firms in the world.
Freeman, Jennifer McCoy and Nikki McCoy-Freeman are family owners of the McCoy-Freeman Real Estate Group on Florida’s Space Coast. Together they have more than 40 years of extensive experience in all aspects of the real estate industry, have sold over $420 million and are ranked in the top 1% of all Florida Realtors.
Among McCoy-Freeman Group’s achievements are Certified Luxury Home Marketing Specialist (CLHMS), Certified Distressed Property Experts (CDPE), Accredited Buyer’s Representative (ABR) and voted Best Realtor in Brevard County. The group has been featured in many news publications including CNN Money Magazine, CNNMoney.com, WFTV 9 News, News 13, WKMG News 6, Coastal Condo Living Magazine, Hot Retirement Towns Magazine and SpaceCoastDaily.com.
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