BiggerPockets Daily What the Last Six Recessions Tell Us About the One That's Coming
Apr 9, 2025
Explore the impact of different types of recessions on real estate, from monetary tightening to economic shocks. Discover how historical downturns like stagflation and the 2008 crisis shaped home prices. Delve into the potential effects of an AI bubble and today’s high interest rates. Understand how investment trends shift towards safe assets during economic uncertainty. Finally, learn about the resilience of homeowners' finances and how it may affect future housing markets, emphasizing caution for investors.
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Recession Types
- Recessions can be categorized into three types: monetary tightening, bubbles, and shocks.
- Each type impacts real estate differently, depending on factors like interest rates and investor behavior.
2001 vs. 2008
- During the 2001 dot-com crash, real estate was seen as a safer investment, leading to rising home prices.
- However, by 2008, housing itself became a bubble, resulting in a significant market crash.
Shock Recessions and Real Estate
- Shock recessions, like the one caused by COVID-19, can sometimes drive up real estate prices.
- This happens as investors seek safer assets like real estate and bonds during times of uncertainty.