The current housing market is hot with high home prices and high demand. Despite these market conditions, whispers of a recession have been attracting the attention of buyers and sellers across the country. People want to know if an economic recession will impact the housing market in 2022. Here, we’ll explore what you need to know about the impact of these economic conditions, specifically on the housing market.
What is a recession?
A recession occurs when there is less trade and economic growth. This happens naturally in global markets. A significant recession occurred around 2008, which had a devastating impact on the housing market. As a result, many potential buyers and sellers are wary about future recessions.
However, real estate agents and their clients should note that even though economists have predicted an impending recession, many believe it will have little impact on the housing market this time around. Here’s why.
Increased housing demand
Those interested in the real estate market should take into consideration the fact that the demand for housing continues to rise, despite other indicators of an economic recession. This will help keep the market strong. Before the 2008 recession, it was commonly understood that a recession in the overall economy did not necessarily correlate exactly with a recession in housing.
Among the homeowners who plan to sell their homes this year, nearly three-quarters of them also plan to buy their next one, which shows a steady market of buyers. Additionally, the largest demographic expected to be active in this year’s market is millennials at 47%. The next largest generational group is Gen Z at 25%, Gen X at 15% and baby boomers at 12%. The strong showing across demographics, particularly younger markets, will help keep the housing market healthy.
Why people continue to rely on real estate professionals
As you work with potential clients, communicate that the best way to buy and sell real estate in the current market is to work with an experienced professional. A professional can help people navigate the market and find the best opportunities for real estate success. When clients want to buy and sell simultaneously, 37% of those surveyed by realtor.com® reported that they preferred to work with a single real estate agent to help with both ends of the transaction. You want to establish yourself as the expert they turn to in these situations.
It’s also important to stay on top of the latest information related to the real estate market and how market conditions change in response to the economy. With the amount of news, data and opinions circulating, some sellers may feel nervous about selling and wonder what might happen in the near future. Reassure sellers that the demand for housing is still holding strong, which means that their chances to buy and sell are still good despite the conversation about a recession and its impact on the housing market.
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