Despite what some might think, we believe our market isn’t headed for another recession over the next few years, and there are three reasons why.

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We believe there won’t be a recession happening in our market over the next three to four years, and there are three reasons why. 

First, there’s a big difference between the loans being done today and the loans that were done prior to the previous recession. Back in 2004, for instance, it seemed all a buyer had to do to get a loan was fog a mirror. There were a lot of scary loans being done. A lot of people with limited income were getting stated income loans, and those loans were negatively amortized for the first several years before the payments went up. It was pretty obvious that those loans were going to go belly-up, and, sure enough, they did. 

After that, the entire industry got pinned down and it became difficult to get a loan. Today it’s become much easier, but not to the degree that it once was. Today’s loans are also given out more intelligently. You have to be able to prove your income, and you have to be able to prove you can afford your loan. 

Second, our unemployment rate is only 3.7%, which is the lowest it’s been in almost 45 years. Back in 2008 when the market crashed, the unemployment rate was 5.8%. In 2009, it jumped all the way up to 9.4%. If someone loses their job today, they’re far less likely to have to wait around for several months before another one comes along. 

We’ll eventually see home prices stabilize.

The last reason is the state of our rental market. Back in 2004 and 2005 when all the loans started going bad, rent was still cheap and it was easier for a lot of families to just sell their homes and become renters. That’s not the case anymore. 

The bottom line is this: We’ll eventually see home prices stabilize. They won’t just keep going up and up and up. We’re actually starting to see this stabilization happen right now.

If you’re thinking of buying or selling a home or you have any other questions about our market and the factors we just mentioned, don’t hesitate to call or email us. We’d be happy to help you.