Unusual Recession Coming?
As a follow up to a blog we posted last month, Lawrence Yun, the chief economist for the National Association of Realtors (NAR) recently said that any recession that came from the Fed’s attempts to slow inflation would probably be unusual in the sense that job creation will continue, which augers for a ‘soft landing’.
Recessions are an economic decline usually characterized by shrinking consumer demand, reduced industrial production, higher unemployment and (sometimes) lower prices. The last recession, from 2008 to 2012, was one of the deepest on record and resulted in heightened unemployment and lower housing values.
Yun pointed out that with today’s sky-high job openings, job creation should continue even if Gross Domestic Product falls for two quarters in a row (the government’s definition of a recession) and make any economic slowdown shorter and less painful than usual.
Yun forecasts the number of home sales will fall slightly this year and next, but he sees home prices continuing to rise as inordinate homebuyer demand chases today’s current inventory shortage. We see the same dynamics affecting foothills housing.