Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

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AndroAsc
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Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by AndroAsc »

Yet another rent increase from landlord this year, 7%...

I'm more on the renter side, because I like the flexibility that I can uproot myself and move if I ever need to. I'm also telling myself I will wait for the next recession, wait for home prices to drop (discount/sales!) then considering purchasing it. However, I'm not fully convinced that will be the case and the 2009 recession could be a fluke.

I use the Seattle market as that is relevant to me. I managed to find this home price index that tracks it since the 1990s:
https://fred.stlouisfed.org/series/ATNHPIUS53033A

From 2007 to 2011, the home price index only dropped by 25%. From 2008 to 2009 it was only a 10% drop. The stock market dropped over 50% during this time.

In the dot.com recession in 2000s, home prices were flat, no drop. Which is really weird, considering it was a tech bubble that burst and Seattle is a major tech hub! Earlier recessions in 1990s and 1980s also had no drop.

What's going on? Why are home prices not dropping during a recession? Is my fundamental assumption that recession = home price drop/discount, time to buy, a flawed one?
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by RickBoglehead »

Yes, it is flawed.
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AndroAsc
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by AndroAsc »

Very similar observations in other places

Los Angeles: https://fred.stlouisfed.org/series/ATNHPIUS31084Q
San Francisco: https://fred.stlouisfed.org/series/ATNHPIUS41884Q
Alchemist
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by Alchemist »

I believe 2009 really was an unprecedented event. Part of the whole reason the bubble blew up so big was that "housing never goes down" was the selling point. The other thing to consider is how bad the housing crash was. I cannot speak for Seattle, but in Florida there are homes that have still not recovered to their bubble heights. I am talking about homes on sale now for $200-250k that sold for more than $300k in 2005.

Housing may dip in the next recession due to lack of demand, but it will not likely be anything like what was seen last time around.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by AndroAsc »

Alchemist wrote: Fri Jan 03, 2020 8:50 pm I believe 2009 really was an unprecedented event. Part of the whole reason the bubble blew up so big was that "housing never goes down" was the selling point. The other thing to consider is how bad the housing crash was. I cannot speak for Seattle, but in Florida there are homes that have still not recovered to their bubble heights. I am talking about homes on sale now for $200-250k that sold for more than $300k in 2005.

Housing may dip in the next recession due to lack of demand, but it will not likely be anything like what was seen last time around.
If the assumption that recession = home price crash is flawed, what metrics or methodology would you approach to decide when it is a "good time" to purchase a home?

Home price metrics for my area are now above the 2007 peak (just before the housing crash), which is why I was waiting for the future discount, that from my understanding now may not materialize.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by RickBoglehead »

Planning on making a profit on a house is flawed logic.

If you spend less than rent, you win.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by Alchemist »

AndroAsc wrote: Fri Jan 03, 2020 8:53 pm If the assumption that recession = home price crash is flawed, what metrics or methodology would you approach to decide when it is a "good time" to purchase a home?
I would not try to time the housing market. I will buy a house when it makes sense for my personal life. I will shop for the best deal available at that time. This might sound unsatisfying, but trying to time the housing market is an attempt at predicting the future with many unknown variables. You are better off accepting that you cannot do this and focus your energy on things you an affect. Like what kind of mortgage, how big a down payment you should put down, whether you want a pool or not, finding a good real estate agent, etc.
Home price metrics for my area are now above the 2007 peak (just before the housing crash), which is why I was waiting for the future discount, that from my understanding now may not materialize.
The problem is that your next crash may not arrive for 10 years and even when it does, prices may not go below what they are now. Advice against market timing is not just good for the stock market, but all markets.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by MotoTrojan »

Was Seattle a tech hub in the 1990's?
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by AerialWombat »

AndroAsc wrote: Fri Jan 03, 2020 8:53 pm If the assumption that recession = home price crash is flawed, what metrics or methodology would you approach to decide when it is a "good time" to purchase a home?

Home price metrics for my area are now above the 2007 peak (just before the housing crash), which is why I was waiting for the future discount, that from my understanding now may not materialize.
“Don’t time the market.”

“Time in the market beats timing the market.”

These should be familiar Boglehead phrases. It applies to housing, as well.
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AndroAsc
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by AndroAsc »

RickBoglehead wrote: Fri Jan 03, 2020 9:01 pm Planning on making a profit on a house is flawed logic.

If you spend less than rent, you win.
It's not trying to make a profit, it's waiting for a good discount.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by Gnirk »

RickBoglehead wrote: Fri Jan 03, 2020 9:01 pm Planning on making a profit on a house is flawed logic.

If you spend less than rent, you win.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by bogglizer »

People who had the means in 2009 purchased houses at a discount, thus preventing the housing market from completely bottoming out. A nice demonstration of transfer of wealth from the marginal to the flush.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by RickBoglehead »

AndroAsc wrote: Fri Jan 03, 2020 9:13 pm
RickBoglehead wrote: Fri Jan 03, 2020 9:01 pm Planning on making a profit on a house is flawed logic.

If you spend less than rent, you win.
It's not trying to make a profit, it's waiting for a good discount.
Let me know when that is...
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by firebirdparts »

2009 was in no way a normal event with respect to real estate. I guess you knew that. It may never happen like that again, ever.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by ohai »

To answer your question, the data is flawed because most people don't sell houses in a down market. Instead, they wait for people to pay a higher price they want. If houses do not print low prices, price indexes don't show declines.

Even the most liquid housing markets, i.e. New York City, have unseen declines in 2018-2019. The tell tale sign is lower transaction volumes. If price discovery was healthy and real estate could be shorted like stocks, then people would push prices lower to find the point of maximum buyer/seller overlap. However, since pricing in this market is controlled by real estate owners, they can collectively refuse to lower prices, leading to lower transaction volumes as fewer buyers reach to those elevated levels.

Some special circumstances do force people into transactions - specifically defaults. If you had to sell your house now, what would be its price? If the buyer has a choice to not sell the house, and just wait until next year, then no price has been discovered.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by yangtui »

I wouldn't assume that whatever causes a material drop in the market wouldn't also hurt you financially. Prices might drop but you might be in an even worse position, relatively speaking, than you are now to buy.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by austin_hiker »

Yes, I saw first hand what happens in the mid-80s in Texas. The housing crash in Texas was solely due to the collapse in oil prices, so somewhat counter to the national economic situation, but I saw entire neighborhoods vacated in Houston, and I barely dodged a bullet in Austin because I ended up not closing on a home here where I had naively gotten into a negative Amortization loan. Took a decade or so for prices to recover:
• Houston, the first Texas city to fall in the oil bust, had its home price index peak at 108.5 in 1983. It also bottomed early, hitting 81.5 in 1987. But it was a long bottom — the index didn't recover to its 1983 level until 1997. So recovery from the market top took 14 years.
• San Antonio peaked in 1984 at 109.7, didn't bottom out until it hit 82.5 in 1990, and didn't recover to its old high until 1995, a period of 11 years.
• Austin peaked in 1986 at 100.1, falling to 72.7 in 1991, and reaching recovery in 1994, about eight years.
• Dallas also peaked in 1986 at 110.1, bottomed at 94.3 in 1989 and regained its old peak in 1997, a period of 11 years.
(from https://www.chron.com/business/article/ ... 809020.php)
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by flaccidsteele »

Recession = house price decline is flawed

I had the best time buying rental property in 2009-2012

The market collapses, I buy. That’s timing the market IMO

The market tells me what to buy

I wasn’t looking to buy rentals, but Back in 2009, the housing market told me to buy rentals

So I did

It probably won’t tell me to do that again in my lifetime
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by SandysDad »

All real estate is LOCAL.

What matters is supply and demand in the specific area. This means more than the large metro, but down to the neighborhood.

Demand is heavily effected by local jobs.

So national recession matters little to what happens in your block!
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by tea_pirate »

Alchemist wrote: Fri Jan 03, 2020 8:50 pm I believe 2009 really was an unprecedented event. Part of the whole reason the bubble blew up so big was that "housing never goes down" was the selling point. The other thing to consider is how bad the housing crash was. I cannot speak for Seattle, but in Florida there are homes that have still not recovered to their bubble heights. I am talking about homes on sale now for $200-250k that sold for more than $300k in 2005.

Housing may dip in the next recession due to lack of demand, but it will not likely be anything like what was seen last time around.
What about the bubble caused by over 3 decades of falling interest rates? Rates dropped by double digits since the early 1980's.

Most people (not talking Bogleheads here) buying houses today seem barely able to afford the payments. A pathetic 2% increase in mortgage rates would result in the monthly payment for an average house in my area increasing by 25%. Obviously most Americans are stretched thin as it is, so prices will be going down if/when that happens.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by bberris »

Alchemist wrote: Fri Jan 03, 2020 8:50 pm .... Part of the whole reason the bubble blew up so big was that "housing never goes down" was the selling point. ....
Yes housing prices can go down, but many people came out better for it. They simply stopped paying, saved the mortgage payment, and bought for cash after foreclosure.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by dknightd »

AndroAsc wrote: Fri Jan 03, 2020 8:53 pm
If the assumption that recession = home price crash is flawed, what metrics or methodology would you approach to decide when it is a "good time" to purchase a home?
I think a good time to buy is when you expect to stay in the same location for at least 5 years (perhaps longer).
Bonus points if you can buy, and cover associated homeowner expenses, for less than it costs to rent.
Like many things, you might not recognize the best time to buy until it is many years in the past.

If rents are increasing at 7%/year (and home prices are going up more slowly), now might be the time . . .
If you value a bird in the hand, pay off the loan. If you are willing to risk getting two birds (or none) from the market, invest the funds.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by z3r0c00l »

House prices have notably dropped near me, with lots of stock on the market still unsold with multiple price drops. This is partially seasonal, and probably partially due to a cooling off of the market after over-building. I don't know that certain west coast cities have gotten there yet, they are the most over-heated markets in the country but have they turned the corner? Yes I would say you can look at prices and decide they are absurd and wait. Worst-case scenario you never buy a place if prices never get reasonable. Sadly no, you can't determine if prices will drop during a recession or note.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by ImUrHuckleberry »

One category of housing that I think does reliably drop during recessions is vacation property. Beach houses, lake houses, condos at ski resorts, etc. I only have my own anecdotal observations that these types of properties seem to go on firesale during recessions, but if there was some way to get real data I would bet it supports it.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by carolinaman »

Homes prices are impacted by different things: the national economy, the local economy (which may be different), supply and demand and other factors. There can be an influx or exodus of major employers which will likely affect home prices.

We were looking for our retirement home in 2008/2010. Home prices in our area were not seriously affected by the Great Recession because our area did not have as many of the bad mortgages. We eventually abandoned our plan for a retirement home because of fear housing prices would continue to drop which they did. There seemed to be a delayed affect on housing prices after the Great Recession, at least in our area.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by Valuethinker »

bberris wrote: Sat Jan 04, 2020 8:38 am
Alchemist wrote: Fri Jan 03, 2020 8:50 pm .... Part of the whole reason the bubble blew up so big was that "housing never goes down" was the selling point. ....
Yes housing prices can go down, but many people came out better for it. They simply stopped paying, saved the mortgage payment, and bought for cash after foreclosure.
Short sale? In a lot of states you are on the hook for the deficit?

Unemployment caused a lot of people to default. Repossessions soared. African Americans were particularly hard hit and since the majority of their wealth is in housing (they have fewer financial assets as a group than other American ethnic groups) their recovery had been slower than for Americans as a whole (if you never reenter the housing market you do not benefit from its recovery).

The people who made out like bandits were Private Equity firms like Blackstone who bought up tracts of homes and eventually refloated them as REITs. Shrewd operators.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by Valuethinker »

carolinaman wrote: Sat Jan 04, 2020 10:25 am Homes prices are impacted by different things: the national economy, the local economy (which may be different), supply and demand and other factors. There can be an influx or exodus of major employers which will likely affect home prices.

We were looking for our retirement home in 2008/2010. Home prices in our area were not seriously affected by the Great Recession because our area did not have as many of the bad mortgages. We eventually abandoned our plan for a retirement home because of fear housing prices would continue to drop which they did. There seemed to be a delayed affect on housing prices after the Great Recession, at least in our area.
Stock markets react almost instantaneously to news affecting economic prospects.

Housing markets are "sticky" on the downside because owners take a long time to adjust to new realities.

Death & Divorce keep real estate agents in business during such times. Death Divorce and corporate Downsizing (eventually).
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by sperry8 »

SandysDad wrote: Sat Jan 04, 2020 8:07 am All real estate is LOCAL.

What matters is supply and demand in the specific area. This means more than the large metro, but down to the neighborhood.

Demand is heavily effected by local jobs.

So national recession matters little to what happens in your block!
+1. A poster above was saying Florida hasn't recovered. Have him come down to Miami, specifically Brickell and see the insane prices down here. RE is a local market. So there are always deals to be had in some markets and always new highs in another.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by Sandtrap »

You are comparing "apples" to "lawn mowers".
Both move independently of each other, but at times seem to relate to each other economically.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by LittleMaggieMae »

I would assume that the only way housing prices would drop during a recession would be based on the length of the recession. A long recession and perhaps house prices would drop - people who needed to sell wouldn't have as big a pool of buyers with money to buy and with enough time people who were out of work might have their houses go to foreclosure/short sale.

The 2009 recession was sort of driven by the housing bubble popping. The value of the houses was driven up by the easy lending and the general demand to "buy a house quick! you can't loose money! - even if you can't afford the house/loan you will be ok as prices go up you'll be able to refi in a year and it will even out! Just tough it out for a few months or a year and you are golden!" The phenomena of investors and regular joes/janes buying price inflated houses with no money (or little money) down was also nationwide. It wasn't just a few areas.

I don't think housing prices will plunge like that again anytime soon. A long term recession might cause housing prices to drop somewhat (or more likely remain flat) but I doubt they will plunge.

I think you need to look at/follow the housing market you want to buy in. You also need to be aware of the median income levels and who lives there and who would want to live there. When housing sales are brisk at more than 4 times the median household income level of an area you gotta think something's not right. (At the height of the housing price run up - I couldn't comfortably afford to "buy" my run down house and I was earning 2 times the median household income for my area. And I was pretty sure people earning enough to comfortably live at those prices in my area wouldn't want to live in my area.)

I think a lot areas are topping out -n I don't think the prices will plunge though. I could be wrong about the topping out. The economy is booming and I suppose a lot of people who want to buy houses have plenty of money and a continued bright earning future and so can buy expensive possibly overpriced houses. so maybe the price run ups can continue.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by LittleMaggieMae »

I would assume that the only way housing prices would drop during a recession would be based on the length of the recession and if the housing was in an area effected by the recession. A long recession and perhaps house prices would drop - people who needed to sell wouldn't have as big a pool of buyers with money to buy and with enough time people who were out of work might have their houses go to foreclosure/short sale.

The 2009 recession was sort of driven by the housing bubble popping. The value of the houses was driven up by the easy lending and the general demand to "buy a house quick! you can't loose money! - even if you can't afford the house/loan you will be ok as prices go up you'll be able to refi in a year and it will even out! Just tough it out for a few months or a year and you are golden!" The phenomena of investors and regular joes/janes buying price inflated houses with no money (or little money) down was also nationwide. It wasn't just a few areas.

I don't think housing prices will plunge like that again anytime soon. A long term recession might cause housing prices to drop somewhat (or more likely remain flat) but I doubt they will plunge.

I think you need to look at/follow the housing market you want to buy in. You also need to be aware of the median income levels and who lives there and who would want to live there. When housing sales are brisk at more than 4 times the median household income level of an area you gotta think something's not right. (At the height of the housing price run up - I couldn't comfortably afford to "buy" my run down house and I was earning 2 times the median household income for my area. And I was pretty sure people earning enough to comfortably live at those prices in my area wouldn't want to live in my area.)

I think a lot areas are topping out -n I don't think the prices will plunge though. I could be wrong about the topping out. The economy is booming and I suppose a lot of people who want to buy houses have plenty of money and a continued bright earning future and so can buy expensive possibly overpriced houses. so maybe the price run ups can continue.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by sperry8 »

Another thing to be aware of is if housing prices drop precipitously, then the value of your stock holdings may also drop similarly. So you may not be able to use your paper gains to buy that distressed house. If you really want to play the game, you'd need to hold cash in anticipation of a future drop (that may or may not occur) and wait it out (potentially missing out on gains while doing so).
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by Workable Goblin »

MotoTrojan wrote: Fri Jan 03, 2020 9:09 pm Was Seattle a tech hub in the 1990's?
Microsoft was huge and Amazon was...well, not what it is now, but it got pretty big for the time by the end of the '90s, so yes.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by Corsair »

SandysDad wrote: Sat Jan 04, 2020 8:07 am All real estate is LOCAL.

What matters is supply and demand in the specific area. This means more than the large metro, but down to the neighborhood.

Demand is heavily effected by local jobs.

So national recession matters little to what happens in your block!
Unless you have foreign buyers who are trying to park their cash.
All posts are my own opinions and are not financial advice.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by golfrgirl »

It’s my observation that recessions can be especially hurtful on certain specific sectors of the economy, e.g., the housing market in 2007-‘8, simply because of bubbles in those sectors that have burst. (Buying frenzies leading to unrealistic and unsustainable pricing and ROIs are indicative of bubbles.)
My pure speculative opinion at this time, living in an area that was hard-hit by the housing bubble burst, is that measures have been taken to prevent another housing bubble from happening relatively soon. But maybe I’m wrong.
I agree with others that if you can still rent for cheaper than owning, you’re better off.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by Xrayman69 »

The “Great Recession “ of 2008-09 was felt to be different than other “recessions “. The recovery since has been tremendous but many would say “expected” as the markets corrected , inefficiencies and unseemly practices (business’ , banking, real estate eric...) were identified and “corrected”. I would say that the ingenuity of the human spirit to constantly identify some alternative “scheme, practice, or method” to get around rules and regulation is limitless. There will be another “recession” the time, depth, breadth, extent is unknown. It will affect the Equity market and real-estate Markets. The affects on both as well as within each market will be asymmetric as they have in the past. Housing markets regionally affected differently as well as business’ affected differently.

The housing market is local and thus local expertise and knowledge can provide an advantage. It’s those that come late to the party or the novices looking entering the “gold rush “ mentality who often get hurt the most. Those with the resources to weather out the correction have opportunity because they have time to not buy high and sell low, bit rather the opposite.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by EnjoyIt »

firebirdparts wrote: Fri Jan 03, 2020 9:40 pm 2009 was in no way a normal event with respect to real estate. I guess you knew that. It may never happen like that again, ever.
Or it may happen next year and worse. Just because it is unprecedented does not mean it can’t be repeated.
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by flaccidsteele »

EnjoyIt wrote: Sun Jan 05, 2020 10:33 am
firebirdparts wrote: Fri Jan 03, 2020 9:40 pm 2009 was in no way a normal event with respect to real estate. I guess you knew that. It may never happen like that again, ever.
Or it may happen next year and worse. Just because it is unprecedented does not mean it can’t be repeated.
I have beautiful dreams like this too, but always wake up disappointed ☹️
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by flaccidsteele »

bberris wrote: Sat Jan 04, 2020 8:38 am
Alchemist wrote: Fri Jan 03, 2020 8:50 pm .... Part of the whole reason the bubble blew up so big was that "housing never goes down" was the selling point. ....
Yes housing prices can go down, but many people came out better for it. They simply stopped paying, saved the mortgage payment, and bought for cash after foreclosure.
From what I remember, if a seller was lucky they got their lender to agree to a short sale. I would then take their house for a song, the lender got a bit of money, and the seller was wiped out

Rinse and repeat

And if it was REO. The I would throw a hail marry offer into the black hole of BoA and 6 months later they would accept my bid
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
KyleAAA
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by KyleAAA »

AndroAsc wrote: Fri Jan 03, 2020 8:37 pm Yet another rent increase from landlord this year, 7%...

I'm more on the renter side, because I like the flexibility that I can uproot myself and move if I ever need to. I'm also telling myself I will wait for the next recession, wait for home prices to drop (discount/sales!) then considering purchasing it. However, I'm not fully convinced that will be the case and the 2009 recession could be a fluke.

I use the Seattle market as that is relevant to me. I managed to find this home price index that tracks it since the 1990s:
https://fred.stlouisfed.org/series/ATNHPIUS53033A

From 2007 to 2011, the home price index only dropped by 25%. From 2008 to 2009 it was only a 10% drop. The stock market dropped over 50% during this time.

In the dot.com recession in 2000s, home prices were flat, no drop. Which is really weird, considering it was a tech bubble that burst and Seattle is a major tech hub! Earlier recessions in 1990s and 1980s also had no drop.

What's going on? Why are home prices not dropping during a recession? Is my fundamental assumption that recession = home price drop/discount, time to buy, a flawed one?
Seattle wasn't much of a tech hub in 2000. Amazon was tiny and Microsoft was quite a bit smaller than it is today. Pay in general did not rise to SV levels until much later. I think the assumption is generally a false one.
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F150HD
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by F150HD »

If you want a home discount, buy in January or February when homes typically sell for 10%ish less then spring/summer (many areas, not all). I view housing differently then other investments, as, you need somewhere to live.
illumination
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by illumination »

Because 2008-2009 is still relatively recent, too many people just assume that's a normal cycle that happens every 10-15 years. When it reality it's not.

Bear markets will of course still happen (we had a 20% plus drop just a little over a year ago) and recessions will still happen, and property bubbles will pop, but I think anyone waiting around for a sale like that era will probably be waiting a really long time. In my state, real estate was literally like 75% off the high in some places. I don't think that's how the next dip is going to go down.
campy2010
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Re: Do Home Prices Really Drop During a Recession, or was 2009 a Fluke?

Post by campy2010 »

I was reading about this recently. The articles suggested that the housing market slows down during recessions because people become fearful of losing their income and avoid big purchases like houses.
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