What Would Happen To California Housing In A Recession?
What would happen to California in a recession? All economists know that it’s not if there is another recession, but when. Many economists checked in with a response to this question on the, “Keeping Current Matters,” national real estate blog. Most expect the economy in general to begin to slow in the latter part of 2018, let’s say 4th quarter. A recession could begin any time after or within the next 18 months. Mark Hulbert, a financial analyst and journalist spoke up and said, “Real estate may be one of your best investments during the next Bear market for stocks–and by real estate, I mean your home or other residential properties.” Mark Fleming, First American’s Chief Economist also weighed in, saying, “If a recession is to occur, it is unlikely to be caused by housing-related activity. And therefore, the housing sector should be one of the leading sources to come out of the recession.” Interesting comments. It still seems like most folks would prefer to own a home as not, heading into an economic downturn, especially with the strong equity growth we have seen the past 5 years.
A final thought, buying is still cheaper than renting according to Trulia. This is true for every metropolitan market except two, both in Northern California. (San Jose area and San Francisco). But Southern California, despite what you read, statistically made the grade with the average of 26%. If you can afford to buy a home, buy one. If you can’t… save, scrimp, buy your first one with partners, but try. It is the clearest way to building wealth.