With economists predicting a recession in the first quarter of 2020, you may be wondering what to do, especially if you were planning on selling your home. While economists don’t see real estate being a cause or a major target of the rumored recession, it will be impacted. According to Investopedia, “weak productivity gains and (mass) retirement” from baby boomers, along with trade policy, stock market upheavals and geopolitical problems according to U.S. News and World Report, will be the leading factors in the downturn. Regardless of the causes, it is important to understand the effects and how a recession could impact the sale of your home.
The housing sector is one of industries that can help turn around the economy. In areas where the recession will likely have minimal effect, homeowners may still feel reasonably safe that they can sell their home and get a good return. And, if a move is in your future, it may be in your best interest to get your home on the market as soon as possible to try to stay ahead of the economic downturn.
If you have the option of staying put and waiting out a potential economic downturn, then by all means, stay put. Just bear in mind that the length of a recession is very difficult to predict. On the positive side, remember that housing markets are continually on an up and down roller coaster so it’s really about calculating risk and rate of return. With that said, if staying put is an option, then hunker down, but if you see a move in your near future because of work or other issues, then go for it now, and do it sooner rather than later.
If you are looking to buy a new home, there are some things you can do to ensure that you don’t lose money on your purchase during an unstable economy. It may be cliché to say “location, location, location,” but this tip is central to making a good decision. Finding the least expensive home with the most potential in a trendy location will more than likely be a great investment. Looking for a home in an up-and-coming neighborhood that still may be rough around the edges will also likely be a good investment but only if you plan to live there long enough to see the neighborhood flourish and survive a potential recession. And, on the flipside, don’t fall into the trap of a good home in a depressed area. The great prices can lure you in but consider the possibility that you may want to sell.
Other considerations you will want to factor in when making a pre-recession purchase is the layout of the home. Selecting a place that isn’t over-the-top unique is important for future resale. Choose a place that will attract the masses, not that one special buyer. Also, choose a home with good bones. If the foundational elements of a home (roof, foundation, heating and cooling, electrical) are solid, then you can sleep better at night knowing you don’t have to spend thousands of dollars to get it in resale condition.
A recession doesn’t have to be the end of the world, instead just approach big purchases, job changes, and housing moves with caution and research. Before you decide one way or another to buy or sell, talk to a knowledgeable and trusted real estate agent. They will help you to get a good pulse on the market where you live and give you some much needed insight.