Does a Recession Mean Home Prices Will Drop? Not Always. Here’s Why.

When the word recession makes headlines, it’s natural for homebuyers and sellers to worry about what’s next. After all, no one wants to make a big move—especially something as major as buying or selling a home—if the market is headed for trouble.

But here’s the truth: A recession does not always lead to a drop in home values. In fact, history tells a very different story.

Let’s break it down.

📉 Recession ≠ Housing Crash

First off, a recession simply means the economy slows down for a period of time—usually marked by things like a drop in consumer spending, job losses, or weaker business growth. It’s not the same thing as a housing crash.

In fact, if we look at the last six U.S. recessions, home prices stayed steady or even went up in four of them.

📊 Here’s what the numbers show (source: CoreLogic & NAR):

Only two of these saw home values go down—1991 and the Great Recession in 2008. The rest? Home prices stayed strong or even grew.

🏠 2008 Was the Exception, Not the Rule

The 2008 housing crash was a rare and extreme case, caused by a perfect storm of risky lending, oversupply of homes, and a financial crisis. That’s not the kind of situation we’re in today.

Today’s homeowners typically have:

• More equity in their homes

• Stricter mortgage lending standards

• Low inventory and steady demand

That’s a recipe for price stability, not a crash.

🔍 What Experts Say

According to a recent article from Forbes, “Home prices have remained resilient through past recessions, with the 2008 crisis standing out as a major exception due to unique market conditions at the time.”

(Source: Forbes)

Even Zillow points out that while recessions slow economic activity, “housing markets don’t necessarily follow the same path, especially when inventory is tight and demand is still present.”

💬 What It Means for You

If you’re thinking about buying or selling in Northeast Florida, don’t let the fear of a recession hold you back. Local markets like St. Augustine are still seeing strong demand, especially with limited inventory and our amazing lifestyle—beaches, boating, great schools, and a growing economy.

In other words: people still want to live here.

🧭 Final Thought

A recession may bring uncertainty—but it doesn’t mean your home’s value will drop. In fact, depending on the market, your home may continue to gain value over time.

If you have questions about what’s happening locally or want to talk through your options, I’m always here to help.

📞 Edward "Ted" Henderson

Realtor®, C2EX, AHWD

Serving St. Augustine & Northeast Florida

📍 Local expertise. Friendly guidance. Real results.

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