Despite a potential recession on the horizon, homebuyers don’t seem to be dissuaded from entering our market.
Today’s topic is one I’ve been talking about for over a year and a half, and it’s something that will start creating major headlines in the mainstream media: a possible recession on the horizon.
According to four prominent surveys (the first of which was conducted by The Wall Street Journal) of economists who believed that a recession was going to happen soon, 22% thought it would occur this year, 46% thought it would happen next year, 18% thought it would happen in 2021, and 14% predicted it would happen sometime after 2021.
With that in mind, Realtor.com is quoted as saying, “Nearly 70 percent of home shoppers this spring think the U.S. will enter a recession in the next three years, but that hasn’t stopped them from trying to close on a home.”
This reiterates a point I’ve been making all along: A recession doesn’t automatically equate to a housing crisis, and people don’t seem to be putting off their home buying plans. Also, more and more economists are starting to think that perhaps a recession isn’t right around the corner.
To quote Lisa Shalett, chief investment officer of wealth management at Morgan Stanley, “I’m not convinced a recession is coming soon…I see an improving housing market (low rates help), a rebound in bank lending, a tight labor market, higher oil prices, and well-behaved credit markets. All these point to a stable U.S. economic outlook.”
In other words, people are feeling pretty good about the economy. At 2:23 in the video above, you can see a chart from the 2018 NAR Aspiring Home Buyers Profile that shows that the percentage of non-owners who want to own a home in the future has gradually increased over the course of 2018.
The pending and existing home sales reports have been volatile, but consumer traffic hasn’t yet reached the levels we experienced at this same time last year. However, as you can see in the slide at 3:16, the number of buyers who are coming into the market has increased over the past three months. What are their reasons for buying? There are several different reasons, some of which are in conflict with the others.
What about sellers? As it turns out, the top reasons people decide to sell vary by age. As you can see at 3:48 in the video, younger sellers tend to sell because their home is too small, whereas older sellers sell because their home is too large or requires too much upkeep. In a sense, each side is selling the type of inventory that the other side wants.
That’s a wrap on my latest market update—if you have any more questions about our market, please don’t hesitate to give me a call or send me an email.
If you plan on selling your home soon, you’re invited to attend my next Home Selling Sharks seminar on June 18. There, you’ll learn everything you need to know in order to sell quickly and for top dollar. To register and learn more, visit my website www.homesharkseminar.com.
I hope to hear from you soon!