Written by Mitchell Rowland / mitchell@chronline.com
Economist Matthew Gardner told local real estate agents and community developers this week that the country is unlikely to fall into recession in 2024.
Gardner, Windermere’s chief economist and a lecturer at the University of Washington, estimates the probability of a recession at about 35%, and if a recession does occur, it could be “really, really modest.” Said it was expensive.
“When you talk about a recession, people immediately go back to 2007. It’s not. It’s not going to be anything like the 2000 recession,” Gardner said of a potential recession. Ta. “It’s going to look a lot like the 1991 recession. It’s a very shallow economy, it’s negative for a few quarters, and then it starts to grow again.”
Gardner said recessions are part of the business cycle and act as a “reset.”
“For most people, they won’t actually notice it,” Gardner says.
Gardner spoke about the possibility of a recession, among other economic issues, Wednesday afternoon at the Lewis County Infrastructure and Real Estate Seminar hosted by the Lewis County Economic Alliance and sponsored by Windermere Real Estate, Twin Star Credit Union and Washington Realtors. Discussed.
“I think part of the presentation was about the housing shortage, real estate trends, purchase rates, short-term rentals, interest rates, infrastructure,” said Dolly Tardif, program manager at the Economic Alliance Business Development Center. “So if we can get more knowledge across the state and even locally, I think it will benefit all of us.”
tough housing market
During the session, Gardner emphasized the ongoing housing shortage in the housing market. He said part of the challenge is that homeowners are locked into low mortgage rates during the economic downturn caused by the COVID-19 pandemic.
“Mortgage interest rates will likely fall, but please be patient,” he said. “But don’t give up.”
Garder said 86% of homeowners have mortgage interest rates below 5%. As of Wednesday, interest rates were hovering around 7.7%, and it’s unlikely that rates will reach that low level again anytime soon. Gardner said higher interest rates mean homeowners are staying in their current homes longer. Typically, a homeowner moves for one of four reasons: death, divorce, job change, or discretion. But rising and slow-moving interest rates have “frozen the housing market both regionally and nationally,” Garder said.
Gardner advised prospective homeowners who missed out on the lower interest rates offered previously: “Hold on a minute. You’re going to be in trouble now.”
Gardner said that despite the tough market, homeownership remains “high on the list of needs” because “that’s how we create wealth.” The median equity of American rental households is approximately $8,000, while the median equity of homeowners is $330,000.
When considering a purchase, Gardner says there are three criteria that need to be met when considering a purchase: be satisfied with your mortgage payments, be satisfied with your job, and be confident that you will continue to live in your home for at least seven years. He said that there is.
“If you meet those three conditions, we congratulate you on purchasing a home,” Gardner said. “But don’t push yourself too hard. Don’t buy just because you can, and don’t stay up all night worrying about paying your mortgage.”
Although challenging, Gardner said the “only way” to increase the supply of Millennials and Gen Z is to increase the supply. To that end, Gardner recommended cutting fees and other costs and encouraging developers to build more housing in the area.
“There are ways to make it happen, but all you need to do is get everyone on board and the fact that it will be beneficial in the long run,” Gardner said.