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Will A Recession Affect NYC Real Estate?

August 28th, 2019 | Posted in Real Estate News

You’ve probably heard the word recession being thrown around across the media recently due to the 800.49 point tank in the Dow Jones. CNN, CNBC, Fox, The NYT, all big media outlets are buzzing.

While several economic indicators suggest that one is likely coming due to uncertainties in the geopolitical scene and the continuing trade war with China. It’s important to understand how this affects the NYC housing market.

Let’s make this clear: a recession is not a housing crisis. In fact, if we take a look at the past five recessions, housing prices were positively impacted for 3/5 of those recessions. Meaning that the value of real estate actually increased during these recessions.

This is because, what most people will do in a volatile stock market is take their money out of the stock market and put it into more secure investments like Real Estate. The 2008 recession is an outlier of sorts as it was directly caused by the over-leveraging of mortgages and this is why housing prices saw such a hard hit.

This time around economic indicators show that any potential recession is directly linked to trade wars, volatile stock markets and uncertainty in the geopolitical climate similar to what we experienced during the 2001 recession where home prices actually rose by 6.60%.

Key Takeaway: Do not let sensationalist headlines about an impending recession trick you into thinking that we are heading for a housing crisis. In fact, this couldn’t be further from the truth- with interest rates being historically low, inventory being at an all time high and prices being super competitive– the NYC housing market is most certainly a buyer’s market.

So, if you’re worried about volatile stock markets it’s a perfect time to invest in real estate. Let us know if you have any questions in the comment section below!

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