Should we beleive everything the Media Is Telling YOU?
Melissa Gootee
I know right now there is uncertainty in the world and everyone has their beliefs and their forecast for the future of real estate. I say if you want real answers, go straight to the source!
The two graphs below (Info from FRED Economic Data) show our recessions over the last 55 years and our housing price Index. As you read each graph you can see that the only time we ever had home prices drop during a recession was our last one.
What does this mean for todays real estate Market? Supplies of homes for sale remain near record lows. And while a jump in mortgage rates has dampened demand somewhat, demand still outpaces supply.
Dates of U.S. recessions as inferred by GDP-based recession indicator
All-Transactions House Price Index for the United States
Why was our last recession different? The bottom line? Banks relied too much on derivatives. They sold too many bad mortgages to keep the supply of derivatives flowing. That was the underlying cause of the recession. We had to many bad loans, loans that were at more than 100% and intrest only loans were a huge factor in our decline.
In Sept 2008 the stock market crashed. Although a stock market crash can cause a recession, in this case, it had already begun. But the crash of 2008 made a bad situation much, much worse.
Between 2008-2009 congress worked on releif packages and programs to bail troubled banks and homeownwers. The recovery took so long because there was so much that happened and it was not put in place quick enough.
As we can see history shows we have gone through many recessions. Are we in a full recession now? Is the Government giving us all the details? Is the media giving the real information? I'm not sure, but know you can always ask me for real data or you can go to FRED Economic Data .
Our times right now can and are challenging right now. Only you know what is right for you and your family. But if you want to have real conversations and help with understanding todays market I am here to help!
Are you thinking that now or in the near future maybe be time to buy a home? You can Contact Me directly or you can Download my Ultimate Buyers Guide.
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