Stay Focused S2 Ep40: Economic Forecast
This week, Erik & Randal delve deeper into the economic cycle and the down spin economists are expecting in 2019/2020.
Randal: Welcome back to Stay Focused, a Focus Real Estate's weekly video blog. This week we're going to chat a little bit about an economic forecast and what that means for the housing market.
Erik: We are right now in the sixth year of a rising economy.
Randal: And a rising housing market so we really turned around from the last recession in 2012 and started to see an increase in home values at that time.
Randal: And looking back historically, in the last 45 years there have actually been six economic recessions.
Erik: Including the one in 2008.
Randal: And including the one in 2008. And five of those recessions resulted in a positive growth in the average sales price in real estate in the United States of 3%.
Erik: Right. Going into those markets and coming out of those markets, housing prices fared well.
Randal: Fared well.
Erik: Those economic recessions. Except for in 2008.
Randal: Except for in 2008 and what's kind of important to distinguish here is that an economic recession does not necessarily mean negative growth in the real estate market. Out of the economists that the Wall Street Journal surveyed, they actually come up with the top three reasons that we may see an economic recession in the next couple of years.
Randal: First being monetary policy. Second being trade policy. And third being a stock market correction. Those are really the things that could impact our housing. Or not impact our housing, impact the ...
Erik: Typically economies go in cycles. Seven, eight years. Rising economy year two of a flatter recession. That's why they're predicting in the next couple years we're probably likely to have some sort of a recession. But it doesn't mean it's bad news for the housing market.
Randal: Yeah. And actually this is leading up to the recession could be a really great time for buyers. Especially in our urban markets where we do most of our business because we're really likely to see just a little bit more an equalized market between the power that sellers yield and the buyers as well.
Randal: And we're happy to share resources with you as well where we're coming up with this information. Thanks for watching everybody. Don't forget to like us on our Facebook page.
Erik: And subscribe to our YouTube channel.
Randal: And until next time, Stay Tuned and Stay Focused.