How Our Market Differs From Recession Markets

Many people are worried the changes in the market mean we are headed for another recession. I’ll go over why there’s no reason to worry about that today. 

Many people have asked me if the changing numbers in our market from 2015 to 2016 mean we’re headed for a market recession in 2017. I’ll go over why there’s no reason to worry about that today.

Back in 1989, the number of homes built was about 180,000, and in 1990, when we entered the recession, we still had about 100,000 new homes built.

In 2005, when the market was strong and healthy, there were 160,000 new homes built. In 2006 sliding into 2007, we still had 110,000 new homes built.

In 2015, there were only 55,000 new homes built, less than one-third of homes built in 2005 and less than half of the number we had when we slid into the recession.

As you can see, the current pattern is nothing like the one we saw with the last two recessions.

The lending environment is also incredibly different than it was when the last recession hit. Back in 2008, the percentage of home loans that were given to those with less than a 620 FICO score was 47%, which is almost half of all the homes loans that were granted.

In 2015, the number of loans that were granted to those with a FICO of less than 620 was 2.3%. There are no more liar loans, which means there are nowhere near as many foreclosures.

The market has come back up since the last recession, and the market is more on 2006 levels when it comes to price.

The market is stable and healthy and the interest rate is still great, so there is no reason to worry.

Overall, the market in 2017 will more than likely bring a 3 to 4% appreciation for home values and there shouldn’t be a downward trend. The market is stable and healthy and the interest rate is still great, so there is no reason to worry.

If you have any more questions, I would be happy to meet with you for a cup of coffee to discuss the market. Otherwise, please feel free to give me a call or send me an email. I’m always happy to help!