The Lake Tahoe real estate market is a hot topic amongst locals and visitors alike. Around the United States, there is a lot of chat about a recession. That word can spark not only a lot of fear, but a lot of confusion. Some people hear that and think “depression”. Some people hear it and think “housing crash”. First, let’s look at the actual definition of the term “recession”.
“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”- According to the National Bureau of Economic Research
90% of our country has a Shelter In Place order in effect. This means the general economy is also on pause due to several non-essential businesses having to temporarily shutter their doors. While a lot of those businesses are operating online or by providing delivery, take out or curbside pick-up, there are still several industries that simply cannot perform in that capacity. While some businesses have been able to pivot and others have been forced to close, the economy is still taking a hit with many experts warning of a recession on the horizon. For those of us who were impacted by the 2008 crash, going through something like that again so soon can be scary. However, there is no need to panic just yet. In fact, in looking at history, the only two recessions to impact housing were the Great Recession of 2007-2009 and the Gulf War Recession from 1990-1991. Otherwise, home values are generally not negatively impacted by recessions, based on the past as well as the above graphic from Keeping Current Matters. Not to mention our current climate has had consistently low inventory with high demand and increasing values. As of today, inventory is still low and values have not decreased. Buyer’s may be pausing for the moment depending on their circumstances which have caused some markets to see a decrease in activity. However, there are still some markets that are quite active. Every area is different, so working closely with your Lake Tahoe Realtor is necessary right now. You may HAVE to sell or buy or you may be able to wait a bit. Each person’s needs and goals are different which means that how you proceed will be unique to you.
Currently, experts are predicting that real estate will lead the way out of the recession. Additionally, pandemic led recessions are considered V shaped, which means the recovery is quick and housing values are rarely heavily impacted.
If you still need to buy or sell, Lake Tahoe Real Estate is currently operating as an essential business. However, there are many rules and regulations in place to protect the Lake Tahoe Realtors, our clients and the vendors we work with. Be sure to chat openly with your Lake Tahoe real estate professional about what the processes are, how long they take and what to expect in general. If you have questions about this, feel free to give me a call. I would be happy to help.