Analysts are eyeing a recession in 2020, but expelling fears of a Great Recession—and, another crisis in the housing market, according to findings from Zillow, released this week.
When asked to pinpoint the recession’s timing, experts favored Q3 2020, according to the survey, conducted in conjunction with Pulsenomics. More than 100 economists and experts participated in the survey.
Aside from the 2008 meltdown, downturns have largely left the market unscathed, according to research by Zillow. In fact, historically, appreciation remained strong, even in periods of recession. Since 1997, appreciation averaged 4.6 percent during economic expansions, and 4 percent in slowdowns—and in that time, there were two major national recessions: the Dot-Com Bubble and the Great Recession. Additionally, of the more than 1,000 recessions regionally and/or in a specific state in that timeframe, annual appreciation leaned majority-positive.
Of the respondents to the survey, 51 percent anticipate demand in the housing market to moderate in 2020, and 32 percent expect it to mirror 2019, when it is largely predicted to remain the same or soften.
“As we look ahead to the next recession, it’s important to recognize how unusual the conditions were that caused the last one, and what’s different about the housing market today,” says Jeff Tucker, economist at Zillow. “Rather than abundant homes, we have a shortage of new-home supply. Rather than risky borrowers taking on adjustable-rate mortgages, we have buyers with sterling credit scores taking out predictable 30-year fixed-rate mortgages. The housing market is simply much less risky than it was 15 years ago, and our experience in recent localized recessions shows how home prices can weather normal economic headwinds.”
For more information, please visit www.zillow.com.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com.
