The economy has been strong year over year for the past 10-years coming out of the “dark years” of the last market correction in ’07 – ’08. Most real estate property owners (home-owners and investors alike) took a big hit on equity, and people saw losses in their stock market portfolios and 401Ks.
Marko Zlatic at Whiteboard Finance is an awesome financial communicator, teacher, and coach. His discussion on the 2020 Recession is a must view for anyone trying to understand the truth in the hype of the 2020 Recession possibilities.
Typically, when a bull market runs very long (in our case the last 10 years) everybody starts asking, “When will the market go back down?” The longer the gains year over year persist the more people get nervous. It’s like riding the Tower of Terror at Disney World. You go up, and stall wondering if you will drop…but you go up again, and stop again just to go up again, all the time wondering if this time the bottom will fall out. We wonder too if this amazing run on the bull market is just too high to sustain more growth and our human nature moves more pessimistic feeling the market will correct with a hard fall; just like being ejected off a bucking bull at the rodeo.
The truth is the market does correct about every year and a half in one direction or another. This acts like a pressure relief and pressure inducer to help our economy grow safely over decades. The market today is a thousand times better than the market conditions in the Great Depression. Those who went through that terrible world-wide correction would have said the world was ending and would never be the same again. But here we are almost 100 years later living the dream of huge gains beyond the imaginations of those who went through the Depression.
We are presently going through the annual seasonal dip in the real estate market. This is making sellers nervous about the potential of a correction. They are asking, “Is this the beginning of a huge drop in the market?” Selling while the market is high is the goal of any investor. But sellers who have placed their homes on the market recently, and have not sold, are asking if they should lower the price or ride it out for the long term. But what if the 2020 spring real estate market doesn’t rise to or above the levels of what homes were selling for in summer 2019? That is a hypothetical question that has a ton of emotion wrapped within it.
It’s my opinion that any market is a good market for real estate; but I’m a real estate broker and love the challenges in every market condition. Yes, we have seen a general cooling in the market since mid-July of this year. But nobody knows when the next correction will happen. But given that average of every year and a half for a correction, we are due for something. That something may not be horrendous or catastrophic from my position, but it will correct someday in one way or another that is a given. YES, sellers will have to consider the market when pricing their homes. But, buyers want a deal and will use the market conditions to support their offer when buying any home. A down market will mean sellers will have to lower their expectations.
Sellers should look at the equity big-picture when considering selling and see the positives in gains through a long term perspective. Selling at a little lower listing price than expected today but realizing the overall equity you’ve gained during your total ownership time should be seen as a positive. You can sell your home any time you want if you set the price correctly to make it of interest to buyers. There are offers on properties being accepted and closings being signed every day. Buyers will ALWAYS be hitting Home Snap, Zillow, and Redfin every day looking for their next possibility, and they can be looking for your home as their next place.
Will we see a 2020 recession? My odds are aligning with Graham Stephan on how to prepare for a potential 2020 recession. Check out his YouTube video. He is entertaining and has a great way to look at the possibility of a 2020 correction. Realize that your real estate situation is specific to you. Nobody can predict the future, but you can be prepared for a market correction big or small and come out pretty well with proper planning and execution.
In the end, it’s just a chess game. And when playing chess there are so many variables that can confuse us all when deciding on the best move to make.
“All chess players encounter this situation in every single game. You are considering your next move and see numerous tempting opportunities. All the moves look equally strong, so which one should you prefer? What is the best move to play?“
Gregory Serper www.chess.com “What is The Best Move?” 2017
Mr. Serper goes on to say, “There is no simple answer to this basic question. If you show the position in question to two players of opposite styles, it is very likely that they will choose different moves. Moreover, even the exact same player can play different moves in different situations. His choice can be based on the tournament situation, the personality of his opponent, his own mood during the game, etc.”
This is exactly the same situation for every buyer and seller. The bond market, the economy (national, regional, and local), the value of the US Dollar (global, national, and local), the motivations of buyers (facts and emotions for every different buyer), and the motivations of sellers (facts and emotions for every different seller) all come into play, and they shift every day as people change, and the markets change with the decisions of the Fed, and the nature of investing. Everything is constantly shifting.
Settle in and make the best choices for your personal situation and how you view the current conditions you are in. There is never a bad time to buy or sell a home. There are times when buyers are in a stronger position, and times when sellers are in the driver’s seat. But all in all as a broad generalization (not specific to a single deal or home sale/purchase) things even out over time. And you are in charge of your own situation and decisions.
As always, I’m asking the question, “How can I help you today?” Even if you are not planning a real estate purchase or sale soon, I want to help you in any way I can with your present situation. Check out our home value analysis for the specific possibilities on your home, and check out our recent Market Update for your area to give you a general look at what’s happening in your city.
I appreciate you looking us up, and letting us be your information source for anything you may have a question on or need help with. We love people, and we love properties. Just reach out with an email, send us a text, or
Cheers,
Michael Jester
Oregon Licensed Real Estate Broker
My Real Estate Advisor Team
(503) 799-8354 cell
(503) 427-9005 office
michaelj@myreateam.com
Bella Casa Real Estate Group
207 NE 19th Street, Suite 100
McMinnville, OR 97128
https://thebellacasagroup.com
