HOUSINGNEWS REPORT
RECESSION FEARS RISING: HOW HOUSING WILL HOLD UP
U.S. MEDIAN HOME PRICES & APPRECIATION
ANNUAL HOME PRICE APPRECIATION
U.S. SINGLE FAMILY & CONDO MEDIAN SALES PRICE
$300,000
20%
15%
$250,000
10%
$200,000
5%
0%
$150,000
-5%
$100,000
-10%
-15%
$50,000
-20%
$0
-25%
each 0.1 percent rate increase results in 35,000 lost sales.
“The risks of a recession in the next 18 to 24 months are rising.” RAY DALIO CO-CHIEF INVESTMENT OFFICER AND CO-CHAIRMAN BRIDGEWATER ASSOCIATES
Already there are signs of a slow-down. Figures from ATTOM Data Solutions show that “home price appreciation decelerated in the second quarter to the slowest pace in two years, but it was still up on an annual basis for the 25th consecutive quarter.” Median home prices were above pre-recession peaks in 65 percent of 122 metro areas. This also means that 35 percent — 42 metro areas — have still not reached pre-recession highs. Is a recession likely? The rising business cycle we now see began in the financial rubble of June 2009 and as of this writing is still going strong. Residential equity went from $13.43 trillion in 2006 to a heart- stopping $6.01 trillion in 2009 and then to $14.4 trillion at the end of 2017.
May that the next recession will arrive in 2020. Economic panels are not alone.
• JPMorgan Chase & Co. co-president Daniel Pinto says equity markets could fall as much as 40 percent in the next two to three years, according to Bloomberg News. • “What could possibly go wrong?” joked Goldman Sachs CEO Lloyd Blankfein on CNN. “I haven’t felt this good since 2006.” • “Second quarter growth likely to be the high point for the rest of the expansion,” said Fannie Mae in July. It added that “we do not expect the robust growth to be sustainable, and our forecast points to a slowdown in the second half of the year.
• “The risks of a recession in the next 18 to 24 months are rising,” said Ray Dalio, Co-Chief Investment Officer & Co-Chairman of Bridgewater Associates, an investment management firm that handles $160 billion in client funds. “While most market players are focusing on the strong 2018, we are focusing more on 2019 and 2020 (which is the next presidential election year). Frankly, it seems to be inappropriate oversight to not be talking about the chances of a recession and what that recession might look like prior to the next election.”
Economists polled separately by The Wall Street Journal and Zillow forecast in
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AUG 2018 | ATTOM DATA SOLUTIONS
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