Whenever you hear the term recession you may instantly have flashbacks to 2008. How could it not? It’s the most recent recession in our history. One that had a lasting impact on so many people and had ripple effects throughout the world.
The 2008 recession got its name as the housing crisis for a reason. Millions of Americans had jumped on the homeownership bandwagon buying homes that they couldn’t afford and/ or getting improved for mortgages that they never should have. And we all remember a little too well what that resulted in. Foreclosures, defaults on mortgages, major financial institutions on Wall Street closing or being bought by other banks.
So what’s different from this real estate market versus the housing crisis of 2008?
1. Back in 2008 after the financial crisis began, there were more foreclosures and short sales than buyers. There was a supply demand issue that resulted in houses sitting on the market for months…years. This is not the case today.
2. Banks became stricter with who they were giving mortgages too to prevent what happened with all the foreclosures. People were buying houses they couldn’t afford, and after losing their jobs were forced into foreclosure.
3. People are still making their mortgage payments, which means less foreclosures and less short sales!
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