Realtor.com: Recession won’t create "fire sale" for housing

A recession is coming. The only question is when. The current expansion, which turned 10 years old last month, is already twice as long as the average U.S. economic growth period, according to the National Bureau of Economic Research. 
About 2% of economists, strategists, academics, and policymakers believe a recession will start this year, realtor.com said, based on a survey of more than 200 members of NBER. Meanwhile, nearly 40% believe one will begin in 2020, while 25% anticipate one starting in 2021. Fourteen percent expect it won't materialize until after 2021. Economists typically define a recession as a contraction in gross domestic product for at least two consecutive quarters.
“Although the R-word may be a trigger for those who remember—or even experienced—the mass layoffs, scores of foreclosures, and plummeting home prices of the last downtown, folks shouldn't panic just yet,” the realtor.com article said. “And they shouldn't expect another real estate fire sale.”
In the last downturn, people who had risky loans such as “exploding ARMs,” mortgages with rates that could quadruple after an introductory period, went into foreclosure when home prices stopped going up and they couldn’t refinance into safer loans. A spike in foreclosures devalued subprime mortgage bonds, leading to a banking crisis and the collapse of Wall Street icons such as Bear Stearns and Lehman Brothers. 
"This is going to be a much shorter recession than the last one," said George Ratiu, realtor.com’s senior economist. "I don't think the next recession will be a repeat of 2008.” 
One reason a housing slowdown won’t lead to a spike in foreclosures is: Lending regulations were tightened after the housing bust spurred the foreclosure crisis, so today’s owners are more qualified, realtor.com said.
"This time we won’t have bad mortgages, just people who are losing jobs," Lawrence Yun, National Association of Realtors chief economist said.
Another help will be the record amount of equity Americans have in their homes, realtor.com said. 
“That means homeowners who lose their job and are unable to make their monthly mortgage payments are much more likely to put their property on the market instead of going into foreclosure,” realtor.com said.

Comments

Post a Comment

Popular posts from this blog

Crucial Coronavirus Cleaning Tips: How To Keep Your Home Germ-Free During the Pandemic

Image
How long the virus survives—and where it thrives The novel coronavirus can survive on surfaces anywhere from hours to days. The latest information is that it can last 24 hours on cardboard, 48 to 72 hours on plastic, and 48 to 72 hours on stainless steel, says  Dr. Reuben Elovitz , internist and CEO at  Private Health Dallas , who cited a recent study from the  New England Journal of Medicine . The duration also depends on a few other factors, like temperature and whether a surface is prone to holding moisture. “Wooden handles, for example, are more likely to be damp than metal under normal conditions—and damp conditions can enable many infectious agents to thrive,” explains molecular biologist  Dr. Tracey Evans . “ Furthermore, a warm room is more favorable for many pathogens than a cold one.” Regardless of what kinds of temperatures and surfaces you have in your home, there are things you can do to keep these dangerous pathogens at bay. Ditch germs at ...
Read more

7 Ways to Create a Neighborly Front Yard

Image
1. Shade the Sidewalk Consider placing a tree where it will shade the sidewalk to help create a pleasant environment and encourage walking and visiting among neighbors. Trees provide rain and sun protection, and temperature differentials of 5 to 15 degrees are felt when walking on tree-canopied streets. In urban areas trees help mitigate the  heat-island effect  and provide a connection to nature. Most cities require permits for adding trees to a parkway (or hell strip), but permits are not usually required for planting on private property. Sean Papich Landscape Architecture 2. Set the Fence Back Placing a low fence or wall back a few feet from the edge of the sidewalk allows room for planting, and plants provide visual interest for pedestrians. In addition to cheerful  daisies  like these, velvety plants such as  lamb’s ears  ( Stachys byzantina ;   USDA zones 4 to 9;  find your zone ) would work well. June Scott Design ...
Read more

What’s New in Outdoor Lighting Design

Image
Linear Lighting There’s a trend toward the more extensive integration of lighting with modern hardscape elements. Sleek, minimalist linear step lighting illuminates a path while keeping light fixtures hidden from view. It also enables you to more easily highlight an architectural feature, such as stairs or a freestanding wall.  ZEN Associates, Inc. Laurie Ghielmetti Floating Structures Another trend is placing lights beneath landscape structures, creating the illusion that they are floating-- light is hidden to visually float steps, benches, bridges and other outdoor landscape elements. dSPACE Studio Ltd, AIA BEGA North America Sleek, Modern Fixtures A big trend is to use path lights that look more architectural, rather than the traditional flower or mushroom shapes. Pistils Landscape Design + Build Nightfall Landscape Lighting Low-Voltage Lighting While low-voltage lighting is not necessarily a new concept,...
Read more