Are We Going Into A Recession?

Are we going into a recession? Here’s the question that keeps coming up and we keep getting asked. The question is, “are we going into a recession?” Hi I’m Rich Barnes, owner broker of Realty Experts in West Allis, Wisconsin 53214. It’s important to remember, recession does not equal housing crisis. According to Doug Brien, CEO of Mynd Property Management, he stated, “with the exception of two recessions, “the Great Recession from 2007 to 2009 and “the Gulf War Recession from 1990 to 91, “no other recessions have impacted “the U.S. housing market.” According to Freddie Mac, home price index data collected from 1975 to 2018. Obviously, the last crash on the housing market in 2008, saw a devastating decrease in home prices because of what was happening back in 2008. In 2008, loans were being rated as D-loans, or being sold as A-loans, also back then, we had stated income loans where people could just state what they made without proving it and therefore often weren’t truthful and couldn’t afford the payments so we had major defaults. Also back then homes from one month to the next were appraising for 20, 30, even high as $100,000 more than the previous home had been sold. This does not make sense and should never have happened. And we have to understand that in 2008 is much different then what’s happening right now. According to David Rosenberg, Chief Economist of Gluskin Sheff and Associates inc., he states, “What 9/11 has in common with what is happening “today is the shock has also generated fear, “angst, and anxiety amongst the general public. “People avoided crowds back then “and they believed another terrorist attack “was coming and we’re acting the same today, “to avoid getting sick. “The same parts of the economy are under pressure. “Airlines, leisure, hospitality, restaurants, “entertainment, consumer discretionary services “in general. “It’s as though all of these services are “on pause or our economy has been put on pause “as people are sheltering in place.” So if we compare this to 9/11 and the .com crash, we see that the S&P 500 dropping drastically from September 2000 to October 2002. However, at the same time we see an increase in the annual home price appreciation, ranging from 6.6 to 8.6 percent nationally. Obviously, this is very different from what we saw in 2008. Hey I’m not giving my opinion, I’m just stating what the experts are saying and I thought it would be of service to you. Feel free to reach out to me here at Realty Experts with any questions or concerns, we’re here to help. Thanks and you have a great day.

Are we going into recession?
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