HOUSINGNEWS REPORT
HOW TO RECESSION-PROOF YOUR REAL ESTATE BUSINESS
real estate is well-positioned to withstand a recession in the next two years, even those like WFG’s Stone who believe a recession is likely. “Unlike the last downturn, real estate won’t be the cause or take the blame, and the impact on real estate will be much less severe,” he said. ”Most markets will not see a downturn in prices, but will witness a noticeable drop in volume.” Several experts suggested that a recession could even benefit the housing market. “An economic slowdown, as predicted by many industry analysts, could bring a more balanced market and ease housing demand,” said Detwiler of Long & Foster. LendingTree’s Kapfidze argued that this easing demand could provide a silver lining for homebuyers. “In the housing market, a recession would temper demand somewhat, but the housing sector would likely experience a milder version of the recession than the rest of the economy,” he said. “The key characteristic of the current housing market is a lack of inventory, thus the housing sector lacks a catalyst for correction, and it is possible it will not be in recession along with the rest of the economy. Finally, a slowdown in momentum in the economy could dampen the rate of house price increases, which would improve affordability for many potential home buyers.”
“Maybe those are tactics and toolsets that prime lenders didn’t think were necessary given their lower delinquency rates. Now is the time to consider those tools because in a recessionary environment the costs you could save with these is tremendous, in the millions of dollars.””
DENIS BROSNAN CEO, DIMONT
“Today we’re still the largest of our kind, and our clients are really outsourcing a very niche type of process,” said Brosnan, referring to the insurance claims process. “Employees are hard to find, they’re expensive … outsourcing works because they are converting fixed costs to variable. … A lot of our clients are rushing to that sort of solution.” DIMONT is also encouraging its mortgage servicing clients to look ahead to the next recession, whenever that may be, and to put into place efficiencies that will quickly multiply into mammoth savings should default
volumes spike. One practical example, according to Brosnan, is to implement efficiencies learned by lenders during the last recession. “Maybe those are tactics and toolsets that prime lenders didn’t think were necessary given their lower delinquency rates,” Brosnan noted. “Now is the time to consider those tools because in a recessionary environment the costs you could save with these is tremendous, in the millions of dollars.”
Cause, Blame, Impact Most industry experts argued that
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SEP 2018 | ATTOM DATA SOLUTIONS
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