submitted by Lynne Kelleher, Berkshire Hathaway Home Services/Fox Roach Realtors Newtown Office
While I can’t predict at what stage of re-opening, if any, Bucks County will be in when you read this, it seems certain that when we do emerge, it will likely be to a recession.
Pundits at Morgan Stanley and Goldman Sachs are predicting the economy will take a deep dive in the second quarter of this year.
What they are not saying, however, is that while a recession is inevitable, a decline in the housing market is not.
Because their home is the largest single asset for many, the effect on home prices seems to be top of mind, even if buying or selling isn’t in the immediate future.
Here’s what three economic leaders are saying about the housing connection to this recession:
Robert Dietz, Chief Economist with National Association of Home Builders– 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– 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).
The bottom line? Don’t panic – this is not 2008 all over again.
This time, housing will be the sector that leads the economic recovery.