Is a recession coming or is the next economic boom in housing market is about to happen?
Some of you may have been following the media about a possible recession. You may be wondering if the recession will impact home prices in Vancouver. To destroy the myths of what is being said about the recession, recession is not a housing crisis.
When people hear “recession” they are going to think about what happened in 2008 and equate it to now. It’s natural to panic but, I don’t think it will be as bad as 2008. It will most likely replicate the 2001 recession.
In the last 5 recessions, only two had any impact on housing. One was in 1991 when home prices went down by less than 2% and the other was clearly in 2008 when home prices dropped by almost 20%.
The other three recessions, home prices went up by as much as 6.5%. Why? Because when the stock market is bad, people tend to take their money out and buy the safest investment called real estate.
Home prices are not going to depreciate if there is a recession. I’m not arguing that the home prices will go down, it probably will. But appreciation is just going to decelerate. What we saw with the home prices in 2008 won’t happen again. All we’re going to see is a slowdown in the percentage of home values going up.
So when we are in a recession, I suggest you double down, refinance and lock in your interest rates for longer time and buy an investment property.
Kim Lee PREC*
Oakwyn Realty Downtown Ltd.