Things in the economy are heating up. Inflation is up, and people are starting to talk about recession. Recession is defined generally as “a fall in GDP in two successive quarters.” Recession is difficult for everyone, but what can we expect a recession to do to home values? Well, let’s take a look at how home values have historically done during or after recessions.

Since the 1980s there have been 6 official recessions in the USA. They were in 1980, 81, 91, 2001, 2008, and 2020. Some of those recessions were worse than others, but they all had their own impact on the housing market. Here’s what happened:

Recessions and the Housing Market

• In 1980…the recession happened and home values went up 6.1%
• In 1981…recession came and house values went up 3.5%.
• The recession of 91 had home values to fall 1.9%.
• In 2001, that recession saw home values to soar up 6.1%.
• The infamous recession of 2008 saw home prices plummet a whopping 19.7%.
• In 2020 when the recession hit we saw home prices go up 6%.

As you can see, historically, in 4 out of 6 of the last recessions, home prices actually went up, not down. Contrary to popular belief, recession does not always negatively impact property values.

What does that mean for us today? Well, it means that if we hit recession level economy, we can’t necessarily expect home prices to drop dramatically. If we’re waiting for property values to plummet, we might be waiting a while. While prices are not soaring as much as they had been in the last two years, we aren’t seeing home prices drop significantly.

Remember, the market of 2022 is not the same as the market of 2008. Be smart. Keep an eye on things (and stick with me).

And as always, if you have any questions, reach out to me.