Leave a Message

Thank you for your message. We will be in touch with you shortly.

The One Thing Every Homeowner Needs To Know About a Recession

Real Estate

The One Thing Every Homeowner Needs To Know About a Recession
A recession does not equal a housing crisis. That’s the one thing that every homeowner today needs to know. Everywhere you look, experts are warning we could be heading toward a recession, and if true, an economic slowdown doesn’t mean homes will lose value.
 
The National Bureau of Economic Research (NBER) defines a recession this way:
 

“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”

To help show that home prices don’t fall every time there’s a recession, take a look at the historical data. There have been six recessions in this country over the past four decades. As the graph below shows, looking at the recessions going all the way back to the 1980s, home prices appreciated four times and depreciated only two times. So, historically, there’s proof that when the economy slows down, it doesn’t mean home values will fall or depreciate.
 
 
The first occasion on the graph when home values depreciated was in the early 1990s when home prices dropped by less than 2%. It happened again during the housing crisis in 2008 when home values declined by almost 20%. Most people vividly remember the housing crisis in 2008 and think if we were to fall into a recession that we’d repeat what happened then. But this housing market isn’t a bubble that’s about to burst. The fundamentals are very different today than they were in 2008. So, we shouldn’t assume we’re heading down the same path.
 

Bottom Line

 
We’re not in a recession in this country, but if one is coming, it doesn’t mean homes will lose value. History proves a recession doesn’t equal a housing crisis.
 

Recent Blog Posts

Stay up to date on the latest real estate trends.

Silicon Valley Newsletter - June 2025

Although affordability has been improving over the past few months, monthly P&I payments are still quite a bit higher than they were last year.

Silicon Valley Newsletter - May 2025

Median purchase price continues to tick up, increasing by 2.75% on a year-over-year basis nationwide.

Silicon Valley Newsletter - April 2025

Mortgage rates have ticked up slightly over the course of the past year, and coincidentally, so has the median sale price of a home in the US.

Flexing Their Equity, Baby Boomers Are Driving the Housing Market

Adults ages 60 to 78 appear to be brushing off current housing challenges more easily than other age groups. Find out what baby boomers—and other age groups—are expect… Read more
Silicon Valley Newsletter - March 2025

One of the headline issues in the real estate industry over the past few years has been, of course, the affordability (or rather the unaffordability) of homes. Unfort… Read more
Should You Sell Your Home in 2025? Here’s What Los Altos, Palo Alto, and Mountain View Homeowners Need to Know
View All

LET'S TALK

You’ve got questions and we can’t wait to answer them.

Contact Us
Get in Touch
Contact Details

Illuminate Properties

(650) 520-7675

[email protected]



228 Hamilton Ave #300

Palo Alto, CA 94301