While the current health crisis is unprecedented, the housing market is surprisingly predictable.
Research shows that over the past 40 years, the U.S. housing industry — and home prices — have been fairly resistant to recessions caused by everything from world wars to natural disasters.
If you’re feeling a little anxious about the state of real estate, here are some things to keep in mind.
1. Single-Family Homes Are Always on the Rise
According to the Federal Housing Finance Agency (FHFA) House Price Index (HPI), single-family home prices typically rise an average of 7.4% leading up to a recession and continue to rise by an average 2.7% during an economic downturn. The only exception was the Great Recession, which was partly caused by weakness in the housing sector and over-leveraging in the financial sector.
Since those industries entered this new recession in strong shape, it’s unlikely we’ll see another exception to the HPI rule.
2. Lower Supply Means Sturdier Prices
Due to the loss of construction capacity coming out of the Great Recession, 2 million to 3 million fewer single-family homes have been added to the market over the last 10 years. This low level of sales inventory has driven the strong price appreciation we’ve seen up until early this year, and will continue to keep prices stable until the market recovers.
And, if the market recovers quickly, the reduced supply may help us avoid widespread price decreases.
3. I’m Always Here for You
As a Licensed Realtor, I hold highly my commitment to keep you updated on the state of real estate in our area. Whether you want to know what’s new in the local housing market or when you can go to an open house again, I will do everything in my power to provide you the information you’re looking for as quickly as possible.
4. I Offer A “Pre-Listing Priority Group”
Despite the uncertainties, it will be the right time for many real estate transactions. You can make the shutdown work to your advantage.
Call or text me today at 717-496-7431 to get on my Pre-listing Priority List for sellers who want to maximize the buyer pool. I welcome your other questions and concerns, as well. Don’t hesitate to be in touch.