Three Reasons Why This Is Not a Housing Crisis

Three Reasons Why This Is Not a Housing Crisis | MyKCM

In times of uncertainty, one of the best things we can do to ease our fears is to educate ourselves with research, facts, and data. Digging into past experiences by reviewing historical trends and understanding the peaks and valleys of what’s come before us is one of the many ways we can confidently evaluate any situation. With concerns of a global recession on everyone’s minds today, it’s important to take an objective look at what has transpired over the years and how the housing market has successfully weathered these storms.

1. The Market Today Is Vastly Different from 2008

We all remember 2008. This is not 2008. Today’s market conditions are far from the time when housing was a key factor that triggered a recession. From easy-to-access mortgages to skyrocketing home price appreciation, a surplus of inventory, excessive equity-tapping, and more – we’re not where we were 12 years ago. None of those factors are in play today. Rest assured, housing is not a catalyst that could spiral us back to that time or place.

According to Danielle Hale, Chief Economist at Realtor.com, if there is a recession:

"It will be different than the Great Recession. Things unraveled pretty quickly, and then the recovery was pretty slow. I would expect this to be milder. There's no dysfunction in the banking system, we don't have many households who are overleveraged with their mortgage payments and are potentially in trouble."

In addition, the Goldman Sachs GDP Forecast released this week indicates that although there is no growth anticipated immediately, gains are forecasted heading into the second half of this year and getting even stronger in early 2021.


Three Reasons Why This Is Not a Housing Crisis | MyKCM
Both of these expert sources indicate this is a momentary event in time, not a collapse of the financial industry. It is a drop that will rebound quickly, a stark difference to the crash of 2008 that failed to get back to a sense of normal for almost four years. Although it poses plenty of near-term financial challenges, a potential recession this year is not a repeat of the long-term housing market crash we remember all too well.

2. A Recession Does Not Equal a Housing Crisis

Next, take a look at the past five recessions in U.S. history. Home values actually appreciated in three of them. It is true that they sank by almost 20% during the last recession, but as we’ve identified above, 2008 presented different circumstances. In the four previous recessions, home values depreciated only once (by less than 2%). In the other three, residential real estate values increased by 3.5%, 6.1%, and 6.6% (see below):Three Reasons Why This Is Not a Housing Crisis | MyKCM

3. We Can Be Confident About What We Know

Concerns about the global impact COVID-19 will have on the economy are real. And they’re scary, as the health and wellness of our friends, families, and loved ones are high on everyone’s emotional radar.

According to Bloomberg,

“Several economists made clear that the extent of the economic wreckage will depend on factors such as how long the virus lasts, whether governments will loosen fiscal policy enough and can markets avoid freezing up.”

That said, we can be confident that, 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.

The reasons we move – marriage, children, job changes, retirement, etc. – are steadfast parts of life. As noted in a recent piece in the New York Times, “Everyone needs someplace to live.” That won’t change.

Bottom Line

Concerns about a recession are real, but housing isn’t the driver. If you have questions about what it means for your family’s homebuying or selling plans, let’s connect to discuss your needs.

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Insider's Guide to the State Fair of Texas

insider's guide to the state fair

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Halloween Events in DFW

Halloween Events in DFW

Click to view the PDF of the top Halloween events in DFW 

 

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Denver Expansion Announcement

Check out our recent press release, as seen on Yahoo Finance, the Star Telegram, and more: http://finance.yahoo.com/news/luxe-homes-team-announces-denver-115100472.html

The Luxe Homes Team Was Recently Awarded the Builder Trade In Program for Dallas, Oklahoma City and DenverChris Smith Luxe Homes Team

Ray and Joy Rice, principal partners of the Luxe Homes Team of Dallas, are pleased to announce that they have been awarded the Builder Trade In Program for Denver, CO, Oklahoma City, OK, and Dallas, TX. Coinciding with the acquirement of the BTIP licenses, the Luxe Homes Team will be expanding into the markets in Denver and Oklahoma City. The team is excited to announce its new Expansion Partner in Denver, Colorado, Chris Smith.

To learn more about the BTIP in Dallas, please visit http://www.luxeofdallas.com/builder-trade-in-program/.

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Posted in
Sept. 29, 2016

U.S. new home sales fall in August but trend still positive

New U.S. single-family home sales posted their biggest decline in nearly a year in August after soaring to nine-year highs the month before, with analysts saying the trend in sales remains positive.

The Commerce Department said on Monday new home sales fell 7.6 percent to a seasonally adjusted annual rate of 609,000 units last month. Sales were up 20.6 percent from a year ago.

Economists polled by Reuters had forecast single-family home sales falling to an annualized rate of 600,000 units last month.

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Posted in Just the Facts
Sept. 27, 2016

ArrowBrooke

New Neighborhood Community in North Texas

arrowbrooke poolArrowBrooke, a master-planned community in Aubrey, between McKinney and Denton, is Horizon Homes’ newest location in the 380 corridor. The 400-acre development is 1.5 miles north of U.S. 380 on F.M. 1385. It features hike-and-bike trails, catch-and-release ponds, a resort-style pool, playground, and open space.

Homes start in the mid-$200s, with 3, 4, and 5 bedroom floor plans ranging from 1610 to 3395 square feet. Homes by Horizon—a division of Dallas-based homebuilder Highland Homes—feature brick exteriors, covered front porches and rear patios, full gutters, fully sodded yards with sprinkler systems, and pre-stained wood privacy fences with steel posts. The interior finish-outs of these homes include granite countertops in the kitchen, stainless steel appliances, garage-door openers, and spacious walk-in closets. Energy-efficient features include tankless water heaters, 16 SEER air conditioning, variable speed heating equipment, programmable thermostats, and R-49 attic insulation.

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Sept. 21, 2016

Why We Do What We Do

The Luxe Home Team likes to have fun. A lot of fun. We really get into the business side of life - helping our clients to buy and sell real estate. We love exceeding client expectations.

But there’s much more to our business than just real estate.

Especially when you stop to consider that life has gotten real for people like Debbie Lee. You might not know who she is, but you will.

Debbie is the mother of Navy SEAL Marc Lee, the first SEAL to make the Alasso Ranch Debbie Leeultimate sacrifice in Operation Iraqi Freedom.  Marc died in a fierce firefight in Ramadi, Iraq, on August 2, 2006. If you’ve watched the movie American Sniper, you saw a reenactment of Marc’s death and the valor with which he sacrificed his life. Marc was posthumously awarded the Silver Star, the Bronze Star with Valor, as well as a Purple Heart.

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Sept. 19, 2016

Fiduciary Duty

Real estate agents toss industry lingo and buzzwords around like service club members pitching candy to kids at a parade: recklessly, with little thought as to whether anyone will catch any of it. For instance, real estate agents often talk about their fiduciary role in real estate transactions, taking for granted that everyone understands the concept as much as they do.

You deserve transparency and a crystal-clear understanding of everything that your real estate agent is doing on your behalf. In this article I’ll demystify the meaning of fiduciary to make it easy enough that anyone can easily understand the word—and what is at stake in your real estate transaction.

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Sept. 16, 2016

Easy Exit Listing Agreement

Taking the Risk Out of Listing Your Home

Mark read the official-looking document he held in his hands, then nervously glanced at his wife, Joan. She raised her eyebrows slightly toward her husband as if to say, “Not so fast.” The real estate agent, sensing Mark and Joan’s hesitation quickly said, “It’s nothing really. Just a little form spelling out what I’ll be doing for you as I sell your home.” 

contractPointing to a couple of spots he said, “If you’ll just sign there and there, we can begin the process of getting your home sold.”

Mark cleared his throat and said, “Before we sign, we have questions.”

It was the real estate agent’s turn to be nervous.

“What kind of questions?”

This scene—or one just like it—plays out daily somewhere in America. The reason is simple: While the decision to sell your home is a big one, it is normal to get a little nervous about signing agreements. 

Why is it that people tend to get jittery when it is time to sign representation agreements? And can anything be done about it?

 

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May 2, 2016

A Tip From Our Coach - How to Find Extra Energy

Energy...In real estate, especially on our team we need lots of it.  Running fast, showing houses from early till late can be exhausting and extremely rewarding.  We love it!  

On our team, energy starts with how we start each day. We know the importance of our morning routines and although each of ours are a bit different, they also share a few similarities.

Here's how we wake up!

After only shallow breathing during sleeping hours we love this power breathing tip from our coach, Tony Robbins.

Take 10 of these "power breaths" three times each day.

 

We hope you find the energy needed to get all the things you need to have done every day.  Enjoy!

 

Source:TonyRobbins.com