The coming recession is a huge topic right now and lots of people are wondering about the effect on downtown Boston real estate prices. What’s going to happen to the housing market? Will we see a Boston condos for sale crash? Here are a few thoughts:
Not all Recessions are the same:
The collapse of the economy during the last recession is not how every future recession and housing market will unfold. I’ve heard things like, “I’m so ready for this recession because I’m going to buy Boston North End condo for sale low after values tank.” But prices don’t always crash during a recession.
Severity matters:
It’s hard to think the Boston real estate market is going to be swayed much if it’s a quick recession. But if Beacon Hill condo buyers and sellers end up struggling financially and losing jobs, we can expect a greater effect on home prices (thanks Captain Obvious). The thing is we don’t know right now how severe of a recession we’re going to have, so that’s why we can’t say exactly what the downtown Boston real estate market will do.
Consumer behavior:
One thing we need to watch is consumer behavior. How will consumers think and act differently in coming time about their purchasing decisions?
Locations aren’t the same:
It’s nice to see what national price metrics have done during various recessions, but national numbers can show a different trend than local data. The Boston real estate market is a lot stronger and stable then the national market as a whole.
What do prices do during a recession?
Sometimes prices have gone down and other times they’ve gone up during (or after) a recession. There’s not a one-size-fits-all answer. I If you’re looking for some historical data in your market, I suggest you check out the Freddie Mac Price Index.
