What Would a 2020 Economic Recession Mean for the Housing Market?
Resource Library Blog

What Does a Possible Economic Recession Mean for the Housing Market?

By now you’ve likely heard murmurings of an impending economic recession. According to the National Association for Business Economics’ Economic Policy Survey, 3 out of 4 of the business economist panelists expect a recession by 2021. But let’s hold off on the panic button for just a minute, because this does not necessarily mean a downturn in the housing market.


In fact, historically, it can mean quite the opposite.

We Aren’t Seeing a Repeat of 2008

Let’s be clear that we’re not going down the same road we went down a decade ago. The infamous 2008 “Great Recession” was caused by the subprime mortgage crisis. Due to overborrowing and flawed lending, the US economy entered a period of intense turmoil and the housing market crashed. If you were in real estate at the time, you remember. Heck, if you were above 18 years old at the time, you remember.


But this time around things are different. For one thing, experts are not predicting that the economy will fall anywhere near the levels it dropped to in 2008. Additionally, this downturn has little to do with the housing industry. While it’s too early to say with certainty, trade conflict is a noted contributor to the instability and recession predictions. Additionally, Germany’s economic dip and Britain’s controversial choice to leave the European Union (Brexit) have added insecurity and uncertainty to the global economy as a whole.


A Few Reasons We Don’t Foresee a Housing Collapse

  • 1. Rates of subprime loans are low (5% in 2015 compared to 20% in 2005)
  • 2. Higher lending standards from banks
  • 3. “Flip” market is under control with tougher lending standards
  • 4. There is a lower rate of bankruptcy filings (50% lower since the implementation of the Affordable Care Act!)

You still with me? Here’s the good news. Most real estate experts predict the housing market will be just fine.

What the Experts are Saying

The numbers below – detailing home price variation during the previous 5 economic recessions have been buzzing around, creating waves on social media over the past few weeks. Real estate expert, Steve Harney, and Keeping Current Matters have been leading the charge to #SpreadTheTruth that an impending recession will not equate to a housing crash. And what we’re seeing is compelling!



As you can see in the above image, home price actually increased during 3 out the 5 most recent recessions. Home prices dipped just slightly in the 1991 recession (approx. -1.9%), and, of course, in “The Great Recession” of 2008, the housing market crashed (prices dipped -19.7%). What this shows us is that a weak housing market is not correlated with a general economic downturn.


The following numbers are from the Zillow Q1 2019 Home Price Expectations Survey. Here you can see that between now and 2023 panelists are predicting increased percentages in home values. Optimistic estimates cap out at about +28.3%, whereas pessimistic predictions still show an increase of +6.6%.



Proceed with Cautious Optimism

(And arm yourself with data)


Of course, for every optimistic prediction you can find a pessimistic one to match. And with data to back it up. So we urge you not to move forward into 2020 thinking that the housing market is indestructible because we all know that is never truly the case.


“Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices. These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers. – Pulsenomics founder Terry Loebs”


Clearly, there is still some room for caution. And if you pay attention to headlines, you’ll see chatter surrounding the bursting of the “housing bubble.” But we believe that overall, moving into the end of 2019 and onwards into 2020, agents shouldn’t be running towards the panic button. Stay calm, stay informed, and keep sharing with your clients.

Get In Front of Your Sphere

Remember: Sharing Information is Your Job!


You are the expert. The hyper-local “go-to.” So it’s your job to stay in the loop not only with national housing trends but also with granular data about your market. Equip yourself with the right information and then get in front of your clients and prospects. When there is good news and promising data shout it from the rooftops! When there’s troubling news, be forthright and help counsel your clients to make the right choice. Make sure your sphere knows that they can trust YOU to give them the information they need to make one of the biggest decisions of their lives.


Save and share this Infographic from Keeping Current Matters to your network!



Expert Real Estate Insights! Webinars, Videos, and Free Downloads

Don't miss the conversation.

Join thousands of real estate professionals and get the strategies you need, straight to your inbox.

Give it a try. It only takes a click to unsubscribe.

Similar Content

How To - November Graphic


3 Common Problems for Real Estate Agents
(and how to solve them)

Speed to Lead


The Modern Agent’s Guide to Social Media Strategy

Speed to Lead


If you don’t follow up, someone else will. Here you’ll find some surprising numbers about speed-to-lead and learn how YOU can take advantage of missed opportunity ($)

Our product tour is here! See why 40k+ agents trust us with their business.

The Essential Guide to Building a Real Estate Business

Ask yourself, do you want to sell houses for the rest of your life or do you want to build a thriving business? In this guide, Jeff Cohn, founder of Elite Real Estate Systems, teaches us how to focus on being a business owner and not just an agent.

Download the Tip Sheet

5 Powerful Business Tips from Steve Harney

Download our Free Guide

The 3 P’s for Winning Listings


4 Steps to a Winning Listing Presentation

It’s time to learn how to land any listing. Here are 4 tried-and-true tips for preparing a listing presentation that wins every time!

Download the Tip Sheet

4 Pillars to Creating & Maintaining a Successful Lead Management Program

7 Tips to Getting Your Agents to Adopt New Technology

They say a tool is only as good as the one who wields it…and this couldn’t be more true with real estate technology. Here you’ll learn how to assure (once and for all) that your agents will adopt the technology that you’ve invested in.

Download the Tip Sheet

Powerful Prospecting Lessons to Build Your Business

Download the Tip Sheet

How to be a Winner in the Real Estate World

How to Structure Your Team for Lead Follow-Up

Lead follow-up is oftentimes what separates the good from the great. In this guide you’ll learn how to structure your team (from the top) for smooth and effective lead follow-up.

Say Hello to Hiring: The Essential Guide to Growing a Team

Expanding your real estate business is an exciting and lucrative time. And in real estate, we know it’s all about your people. Check out this free guide with tips for effective hiring practices.

The Modern Real Estate Chief Marketing Officer

In real estate today it’s not enough to just be great at selling houses. In this guide we’ll cover how and why you should consider investing in a Chief Marketing Officer.


6 Tips for Standing out Against Competitors [Free Tip Sheet]

In real estate, things move fast and the competition doesn’t sleep. So, what are you doing to stand out? In order to be the go-to agent, you need to be one step ahead of your competitors. Start with these 6 quick tips.

Register for the Series

Fill out this form and register for all of our upcoming webinars at once!

Ready to see a demo?

See what BoomTown can do for your business.

FREE: 1-3-5 Goal Setting Template

Turn dreams of success into celebrations of success. Stay on track with our goal worksheet.

Seller Lead eBook

How Top Agents Survive (and Thrive) in a Turning Real Estate Market

What do you do when the real estate market shifts? When the pendulum swings from buyers to sellers (or vice versa) in your market, make sure you’re ready.


Want to handle objections like a champion?
Download our scripts playbook!

Seller Lead eBook


Convert seller leads. Get the best strategies to conquer listings in your market.

The Real Estate Teams Playbook

We partnered with REAL Trends to conduct interviews with thousands of real estate professionals and the industry’s top performing teams. This playbook contains all of their best strategies for starting and growing a team as well as the systems that must be in place to ensure long-term success.