Things are uncertain right now, but what’s certain is that the Great Recession and the coronavirus impact are two totally different beasts. Here’s why.
The coronavirus has spurred many 2008 flashbacks, though I believe unnecessarily. The truth is, what’s happening now is nothing like what happened to the economy and the real estate market back in 2008. Here are five differences to back that up:
1. Mortgage standards are still in effect. Lenders still need you to have a job, they still need you to have income, they still need you to have assets. Unlike in 2008, when subprime mortgages were rampant, no one’s dropping their standards whatsoever. Financial institutions still have money to lend, but they’re not just giving it out to anyone who has a heartbeat. 2. Prices are not out of control. Diligent appraisers have helped us in this regard, as has the fact that loans are being issued way more responsibly. 3. There’s a shortage of homes. We have more buyers than homes to sell, which helps to keep prices down. It also serves to regulate the number of homes going on the market and allows appraisers to do their jobs efficiently. 4. Houses are still affordable. Things are pretty darn stable. 5. People have a lot of equity in their homes right now. In 2008, people were upside down on their mortgages, which is a far cry from our current reality.
If you want a deeper discussion on the differences between what’s unfolding now and the Great Recession, or you’re interested in making a real estate move but aren’t sure how, please give me a call. I’d love to hear from you and answer any questions you may have.
