The current housing market is hot with high home prices and high demand. Despite these market conditions, whispers of a recession have been attracting the attention of buyers and sellers across the country. People want to know if an economic recession will impact the housing market in 2022. We will explore what you need to know about the impact of these economic conditions, specifically on the housing market.
What is a Recession?
A recession occurs when there is less trade and economic growth. This happens naturally in global markets. A significant recession occurred around 2008, which had a devastating impact on the housing market. As a result, many potential buyers and sellers are wary about future recessions.
However, real estate agents and their clients should note that even though economists have predicted an impending recession, many believe that it will have little impact on the housing market this time around. We will explore some key reasons why the recession will impact real estate differently this time.
Increased Housing Demands
Those interested in the real estate market should note first that the demand for housing continues to rise, despite other indicators of an economic recession. This will help to keep the market strong. Before the 2008 recession, it was commonly understood that a recession in the overall economy did not necessarily correlate exactly with a recession in housing.
Among the homeowners who plan to sell their homes this year, nearly three-quarters of them also plan to buy their next one, which shows a steady market of buyers. Additionally, the largest demographic group of sellers-buyers expected to be active in this year’s market are Millennials at 47%. The next largest generational group is Gen Z at 25%, Gen X at 15%, and Baby Boomers at 12%. The strong showing across demographics, particularly younger markets, will help keep the housing market healthy.
With this steady market of home sellers and buyers, those interested in real estate do not have to worry excessively about a potential recession in real estate.
Why People Continue to Rely on Real Estate Professionals
As you work with potential clients interested in buying and selling homes, you want to communicate that the best way to buy and sell real estate in the current market is to work with an experienced professional. A professional can help these owners navigate the market and find the best opportunities for real estate success. When clients want to buy and sell simultaneously, 37% of those surveyed by Realtors.com reported that they preferred to work with a single real estate agent to help with both ends of the transaction. You want to establish yourself as the expert they turn to in these situations.
As an agent, you want to stay on top of the latest information related to the real estate market and how market conditions change in response to the economy. With the amount of news, data, and opinions circulating, some sellers may feel nervous about selling now and wonder what might happen in the near future.
You want to reassure sellers that the demand for housing continues to rise, which means that their chances to buy and sell are still good despite the conversation about a recession and its impact on the housing market.
As you work to engage your clients better and present yourself as a trustworthy reference and a local expert, you want to make sure your skills remain in peak condition. Real Estate Express works to provide real estate agents with the training and classes you need to improve their ability to serve clients and build their real estate business.