There is a prediction of a recession during the next 24 months - but, what exactly is a recession and how does it impact home prices. As we have shared previously, a recession does NOT mean lower home prices. A recession is simply a fall in GDP for two consecutive quarters. History teaches us that home prices during the last 5 or so recessions have gone up - yes, up!
While many believe a recession is imminent, those same folks believe home prices will continue to rise - just not at the same rate. Does a home sound like a good investment to you? You can live in your investment!
What is the number one regulator of price? It is supply and demand. The population is growing and there are only so many homes available for sale. The lack of properties for sale has been ongoing and is expected to continue into next year - and perhaps beyond... which we will look at in a future report.
As the market returns to a more "normal" state of supply/demand, the appreciation rate will likely slow down. Is that a bad thing? No! A nice steady and reasonable rate of appreciation is a sign of a balanced market. It serves us well.
Right now, the laws of supply and demand are working as they should. The lack of supply causes prices to increase. As we stated previously, when demand softens we will see price appreciation slow - not stop, just slow to a lower rate. That is a good sign and an opportunity for market adjustment allowing affordability to stabilize.
Get in there now and let your home investment work for you.