What is the Difference Between a Recession and a Housing Crisis?

Hi, this is Nikki with Live Florida Realty with this week’s market update.

This week we will discuss the differences between a recession and a housing crisis.

Many market professionals are predicting a slow down over the next few years.

Due to the severity of the housing crisis in 2008 many people are terrified of the possibility of a recession.

As many of you may know a mortgage melt down caused by poor lending practices in 2008 greatly interrupted not only the American economy but the economy worldwide!

This mortgage melt down lead to a recession and a housing crisis that reduced home prices by upwards of 19.7 percent!

Many people fear that future recessions might have similar effects on our local housing markets.

Historically, housing prices have only gone down 1 other time during the last 5 recessions. Three of the last five recessions had increases in housing prices ranging between 3.5 and 6.6 percent.

With that being said, a recession does not always mean a housing crisis.

In fact, researchers believe we will see an increase in housing prices during the next recession rather than a decrease.

This is good news for current buyers and future sellers that are apprehensive to make any real estate moves over the next few years.

Again, this is Nikki with Live Florida Realty and we’ll see you next week for another market update!

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