After what seemed like ages, the tone of the news started to slowly brighten last week. Government officials began to discuss how they anticipated managing a return to pre-pandemic life—one replete with businesses open to the public, sporting events, and even restaurants with sit-down service. “Light at the end of the tunnel” was the metaphor used most often, even though the length of that tunnel was yet to be determined.
All wasn’t unbridled optimism. Balancing the better health forecasts was a sour note on the economic front: a wide consensus that the immediate post-CORVID-19 economy was bound to produce a recession.
For Houston homeowners who had delayed listing their properties while the epidemic raged, the word “recession” would probably be disquieting. Despite wide agreement that any recession would likely be a brief one, until such a bounce-back is underway, how dire might the effect on Houston home values be?
Consulting the history books actually reveals a surprising hint—one to quell those jangled nerves. The statisticians at CoreLogic have charted home price changes during all five recessions since 1960. In three of them, home prices actually rose!
In 1980, they climbed 6.1%; in 1961, 3.5%. The 1991 recession did post a minor decline of 1.9%—but that was followed by a rise in prices of 6.6% in 2001. The 2008 Great Recession was the only real anomaly, but that was due to a unique circumstance: its basis was rooted in the global mortgage financing fiasco. As Realtor® B. Freeman wrote, “…while we don’t know the exact impact the virus will have on the housing market, we do know that housing isn’t the driver.” Another factor—the ongoing shortage of housing inventory—should also continue to bolster home values.
As Houston residents begin to contemplate their return to regular life in post-emergency Texas, robust real estate activity might well brighten the picture. After all, Houston’s peak real estate season was abruptly interrupted by the pandemic—which means there has to be a significant amount of pent-up demand. Call Rinnovare Realty, LLC at (832) 445-4957 to discuss the preparations now underway!