Date Archives: April 13th, 2020
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13
Recession? Yes. Housing Crash? No.
Recession? Yes. Housing Crash? No.
With over 90% of Americans now under a shelter-in-place order, many experts are warning that the American economy is heading toward a recession, if it's not in one already. What does that mean to the residential real estate market?
What is a recession?
According to the National Bureau of Economic Research:
"A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."
COVID-19 hit the pause button on the American economy in the middle of March. Goldman Sachs, JP Morgan, and Morgan Stanley are all calling for a deep dive in the economy in the second quarter of this year. Though we may not yet be in a recession by the technical definition of the word today, most believe history will show we were in one from April to June.
Does that mean we're headed for another housing crash?
Many fear a recession will mean a repeat of the housing crash that occurred during the Great Recession of 2006-2008. The past, however, shows us that most recessions do not adversely impact home values. Doug Brien, CEO of Mynd Property Management, explains:
"With the exception of two recessions, the Great Recession from 2007-2009, & the Gulf War recession from 1990-1991, no other recessions have impacted the U.S. housing market, according to Freddie Mac Home Price Index data collected from 1975 to 2018."
CoreLogic, in a second study of the last five recessions, found the same. Here's a graph of their findings:
What are the experts saying this time?
This is what three economic leaders are saying about the housing connection to this recession:
Robert Dietz, Chief Economist with NAHB
"The housing sector enters this recession underbuilt rather than overbuilt…That means as the economy rebounds - which it will at some stage - housing is set to help lead the way out."
Ali Wolf, Chief Economist with Meyers Research
"Last time housing led the recession…This time it's poised to bring us out. This is the Great Recession for leisure, hospitality, trade and transportation in that this recession will feel as bad as the Great Recession did to housing."
John Burns, founder of John Burns Consulting, also revealed that his firm's research concluded that recessions caused by a pandemic usually do not significantly impact home values:
"Historical analysis showed us that pandemics are usually V-shaped (sharp recessions that recover quickly enough to provide little damage to home prices)."
Bottom Line
If we're not in a recession yet, we're about to be in one. This time, however, housing will be the sector that leads the economic recovery.
13
5 Tips for Picking a Neighborhood Your Dog will Love
There's so much to consider when picking out a new neighborhood. It needs to be the proper place for you and your family, but what about Fido? Will your dog love and appreciate the neighborhood that you choose? Here are five tips for picking a neighborhood your dog will love.
- Get a Big Yard
It's convenient to let your pooch play in your own yard without having to take him on a leash to the park each day. Consider how much space your dog will have to roam. Bonus points if there is a safe, reliable fence, doghouse, or kennel already included with the yard. - Check Out Other Dogs
When you go to check out a house or neighborhood be on the lookout for people out walking their dogs. Or maybe you'll see some pups playing in a fenced-in yard. These are good clues that your neighbors enjoy dogs and that you'll probably be warmly welcomed. - Find Easy Access to Dog Care
As a pet owner, you want to be prepared when you move into your new neighborhood. Have an idea of where to find the following pet services.
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- Does this new neighborhood offer close proximity to a veterinarian clinic? If your dog currently has prescriptions, can you or another family member get to the clinic easily to fill them when they're due?
- Does the vet clinic offer 24/7 emergency services?
- Are there obedience classes and groomers in the area?
- Are there specialty pet stores or wholesale stores that offer the necessities?
- If you work long hours, take vacations, or need to hop on a plane for a family emergency across the state or country, is there a highly-rated doggy daycare, a network of pet sitters, or any kennels nearby?
- Seek Safe Walking Paths
Your dog will love a neighborhood where they can go on frequent walks with you. Be on the lookout for well-lit sidewalks. If there are no sidewalks, is the street full and safe enough to walk in regularly? You and your dog need a convenient way to exercise, and whether you walk down the sidewalk for an hour a day or need a quick way to get to the local dog park, great walking paths are a necessity. If you live in a snowy area, take notice of whether your neighbors and the city/town employees clear the sidewalks promptly. - Check Out Community Camaraderie
Does your neighborhood seem to welcome four-legged friends? Be on the lookout for the following things when touring the neighborhood:
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- Are there several "No Pets Allowed" signs?
- Do community members allow their pets to wander? If so, will rogue cats and dogs drive your pup crazy and turn stress-relieving walks into nightmares?
- Do the restaurants include seating for pups or outdoor patio areas for you and your canine companion to dine?
- Are there trash cans along the main streets to offload stinky poop bags during outings?
- Are dog parks within walking distance? Try to hit the park on a busy weekend to see if the dogs and their owners seem respectful of one another.
- Are there community canine-themed events like dog shows and parades?
These tips will help you get a good idea if this new neighborhood will be the best fit for you and your canine. Our real estate agents are also here to assist you. Contact us, and we can help you find the perfect neighborhood for you and your pooch.
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