Recession does not mean a Housing Collapse!
Not counting the largest recession of our lifetime, which is of course the freshest in our memory, home prices went up 4% (on average) during the last four U.S. recessions. With only one of the four having a depreciation of home values, and that was by -1.9% in the early 90’s.
(National Home Price Index)
A reset, refresh, recession, correction, whatever you want to call it, is bound to occur, but let’s pay attention to the full facts of our history, not just what happened most recently. The consensus from experts across the Nation is that a slowdown is likely to occur within the next 2 years.
*2019 Zillow Home Price Expectations Survey
These experts also believe home value appreciation will slow from 4.1% in 2019 to potentially 2.5% and then pull back up close to 4%, all within the next 4-5 years. So similar to the majority of the US recessions going back to the 1980’s, we will most likely see a slow in appreciation, not a depreciation of home values.
*2019 Zillow Home Price Expectations Survey
What does this mean for Central Oregon home sellers?
A change of some sort will happen, but we have no reason to believe it will bring values down. We need to be prepared to price our homes more conservatively and not expect to “set the market” with every new home sold in every neighborhood. Doing so can increase our days on market significantly and higher days on market leads to lower and lower offers.
Rightfully so, every seller wants to get as much for their home as possible, but with a changing market, sellers should not expect to get significantly more than their neighbors, even if they feel their home is significantly “better”.
Days on market, in general, should increase as we get used to a new normal. We will see a little less inventory, both as we hit the winter and as sellers take a breath before putting their homes on the market – they will need a second to see that they can sell and then buy again with confidence.
We will see a few months of dipping consumer confidence, but it will come back, it always does. Make decisions on what is best for you and your family and rest assured that those of us in the industry don’t see anything tragic coming down the pipe.