You thought that the last episode was the last one in David Sidoni’s 2023 housing market predictions series. PSYCHE. In this BONUS episode, he gives you some insight on how a recession could totally upend all the other predictions we’ve talked about so far.
So, buckle your seatbelts because it’s going to be a wild ride.
Here are the biggest takeaways from today’s discussion:
- How recessions have affected the housing market in years past
- A brief review of the projected trends for 2023
- What could happen to sales if the government gets involved
- How inventory could be the key to an unexpected market change
[02:31] Here’s a Quick Recap
You should be expecting a normalizing and stabilizing housing market in 2023 (EXCEPT RENTS – sorry). Mortgage rates are likely to gradually decrease. Home prices will probably increase or decrease around 1-2% because demand is still higher than supply. Don’t believe him? Go back and listen to the previous four episodes and believe.
[5:25] Okay, What Happens If We Go Into a Stanky Recession?
David’s got a truth bomb for you: we’re already floating in and out of a recession and have been for about 6-8 months. However, several folks are expecting things to get worse in 2023. The stock market hasn’t had a major dip since 2008 – which is around 15 YEARS – so we’re about due for another one and it’s time to start preparing. Typically during an economic downturn, the government will cut interest rates causing home prices, mortgage rates and other factors to fall and could bring more buyers to the market. But, a more severe recession could mean fewer sales. BUT inventory will still be low! Which brings us back to supply and demand. More buyers = more demand = higher prices. Boom.
[13:58] Let’s Look At the History
In the last 4 out 6 recessions, home prices went UP. In 2008, the crash was caused by the housing market, but this next one will not be because inventory is too low. A regular recession usually does not impact housing. The 2008 one that we’re all familiar with was an anomaly.