I am happy to be speaking with you today, to bring you the latest market intel.
We, all realtors, are gathering feedback from our clients. Concerns that Waco in particular
Is in a price bubble. Buyers are fearful of another housing crisis.
And waco, they believe, is especially susceptible due to the popularity of a local tv show.
Couple this with talk of a recession and Boom!
Buyer paralysis and Price Slashing
In reality, the growth of waco, and the current market conditions, follow more closely with the
Macro econony, the market from a national level.
so.,,, OUR market research partners at Keeping Current Matters have formulated this
Data for us, to share with you, to help you MOVE FORWARD WITH CONFIDENCE.
FIRST, the Wall Street Journal and their crew of 30+ staff economists released this statement…
“The economic expansion that began in mid-2009 and already ranks as the second-longest in American history most likely will end in 2020 as the Federal Reserve raises interest rates to cool off an over-heating economy…
Recessions are notoriously difficult to predict… Forecasters saw the chances of a recession rise back in 2011
and in 2016; both turned out to be false alarms.”
so, our team thought, hmmm….
Let’s confer with other reliable sources and see.
Pulsenomics, within a short time of the WSJ’s statement, issued a survey to numerous
economists, market analysts and real estate experts with 3 questions.
1 – when do you believe a recession will occur and
2 – what are the triggers
3 – what will happen to home prices and interest rates
Before we talk about the results of that survey, it’s important to stop and define exactly what
A recession is.
From Merriam-Webster Dictionary
RECESSION (noun) 1. a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
So while this word is regarded as negative, it doesn’t imply that conditions are tragic.
A “decline in activity” could be just a slower rate of increase….
Not necessarily a negative rate.
Back to the Pulsenomics survey.
2nd question, what are the triggers? Ie. What will cause the recession.
1st Place with 137 Points – Monetary Policy
2nd Place with 71 Points – Trade Policy
3rd Place with 69 Points – Stock Market Correction
and, waaaayyyy down at #9 with 17 Points – Housing Market Crisis
so, let’s Now compare and contrast 2008 to 2018.
To illustrate why the Housing Market Is so low on the list of possible triggers….
You see for years prior to the housing crisis, the availability of credit was un chained.
Just about anyone could get a loan.
Contrasting sharply with TODAY’s standards, which are, as you can see, too strict.
Leaving a large market of credit worthy buyers unserved.
Because of these loose lending practices, you will see now where Forclosures start to increase. Starkly so in 2007, 8 and 9..
so, we can already start to see here how THEN, was very different from NOW.
And actually, what happened THEN is a HOUSING CRISIS
That TRIGGERED the RECESSION!
Mark Fleming, chief economist at First American agrees, and says….
“If a recession is to occur, it is unlikely to be caused by housing-related activity, and therefore the housing sector should be one of the leading sources to
come out of the recession.”
Back to the survey…. Question 3.
What will happen to home prices and interest rates….
Because now that we know that a housing crisis like we are all panicking about,
Is HIGHLY UNLIKELY, we want to know what to do, how to plan,
When to sell, when to buy….
so, my KCM research team looked in to the Pulsenomics responses, and considered
A statement issued by another highly trusted residential housing market expert – the Z Report
“While economic activity appears to have accelerated so far in 2018, some prominent economic forecasters have become more cautious about growth prospects for 2019 and 2020….
All told, while solid long-term demographic underpinnings support our fundamental outlook for housing, in the event micro-climactic headwinds surface, we would expect housing transaction volumes and home prices to weather the storm.”
They thought, yeah, this is great!
Maybe we should look back at the last several recessions to see exactly what happened
To housing, because we want our people to know when to buy, when to sell, when planning for
Their family’s financial future
This is what they found: in the last 6 recessions, over the last 45 years, except for 2008, home prices actually increased.
So the housing market actually still grew at a positive rate.
well, yeah, but how will rising INTEREST RATES impact this.
My fabulous team also looked in to this….
And found that
The last 6 times that mortgage rates increased,
SO DID HOME PRICES!
Thanks! I feel a LOT Better now, knowing what is actually NOT going to happen now.
Yeah, but what about the recent price slashing!!!!
While the Fed’s increase rates to cool off the “over heated economy”
And the recession approaches,
Equity gains, or appreciation, will slow down.
so, home sales prices are returning to pre-2016 craziness, and that seems like a reduction, but
It’s more of a correction.
1 – it’s going to take some time for this data to make its way through the market.
Until then, buyers – JUMP ON THE FEAR WAGON!
2 – over the next year or 2, it will still be a GREAT time to buy!
Especially if you are renting!!!
as interest rates rise, your purchasing power decreases
As appreciation continues to gain, rental rates will go up
IF YOU ARE A SELLER
1 – know the local market, and the national market
2 – price your home correctly
3 – be patient!
THANK YOU SO MUCH FOR YOUR TIME!
THANK YOU TO MY KEEPING CURRENT MATTERS MARKET RESEARCH TEAM – THEY ARE THE BOMB!
I APPRECIATE ANY COMMENTS OR QUESTIONS.
ITS BEEN MY PLEASURE 🙂