Whats Different About This Housing Downturn Compared to the Last One?
This housing downturn has proved to be far more severe than the last one we experienced in 2008. Here are some major differences between the two market crashes and what makes this one stand out:
1. Property values have decreased significantly more this time around. In 2008, property values peaked just before house prices began to decline, but during this downturn we are seeing house prices plunge at a much steeper rate then before. This could lead to homeowners having less equity in their homes which would harm the overall economy as well.
2. Access to credit has become much tighter since the previous crash of 2008. Most lenders have tightened up their lending requirements which makes it difficult for many people looking for new homes or wanting to refinance existing mortgages to get access to funds they need to purchase a home.
3. The entire country was affected by the downturn of 2008 while this time around certain markets were hit harder than others. While some states saw an increase in population due to people moving out of high cost cities, other regions like Las Vegas, Phoenix, and parts of Arizona suffered greatly from population decrease due largely in part because these areas heavily relied on construction jobs that dried up quickly once the market crashed.
Perhaps most importantly however is how different our response has been this time compared with last time’s crash:
4. Government intervention has been much more swift and aggressive during this housing crisis then when compared with what happened back in 2008 as governmental
How Has the Current Housing Market Changed from Previous Ones?
The current housing market is in a state of flux due to a variety of factors, ranging from the still recovering economy, low mortgage rates, and political instability. Many people have found value in choosing to rent instead of buy in this uncertain environment.
Home prices have been relatively stable since just before the real estate crash of 2008. Even with these recent rises, it’s important to understand that home prices remain lower than the pre-crash era. Initially buyers may be wary about committing to such a purchase but with decreasing interest rates now could be the perfect time to invest.
Further contributing to the turbulence in today’s housing market are shortened days on market for properties as well as an increase in bidding wars over desirable homes – both signs common of a strengthening housing sector. However, some buyers find themselves running into difficulty when trying to outbid other potential buyers due to tightened loan requirements by lending institutions; a requirement many potential home owners aren’t adequately prepared for or able to meet right away.
For those frustrated with thecurrent situation there is hope however. The mortgage industry is always evolving and producing new opportunities for would-be homeowners – special considerations like rehabilitative loan programs can give borrowers back more control over their dream investments without having everything tied down by stringent financial hoops they are unable jump through right away. Additionally there are often multiple financing options available that feature no money down terms which help first time homebuyers enter this competitive marketplace and avoid large payment penalties up
Why Is the Current Housing Market Decline Different Than 2008?
The housing market decline in the present day is markedly different from the decline experienced during 2008. While both downturns are defined by a shrinking market and decreased home prices, the circumstances that led up to each downturn differ greatly.
In 2008, a global financial crisis sparked by years of irresponsible lending practices led to an epic collapse in the housing market. Banks began repossessing homes at such high rates that it single-handedly caused a credit crunch and recession, sending shockwaves throughout the economy.
Conversely, today’s housing market decline can be linked directly to global health concerns resulting from a worldwide pandemic: COVID-19 has been responsible for massive unemployment and reduced consumer spending, which have had devastating impacts on the existing housing market. Furthermore, due to stay-at-home orders enforced worldwide in efforts to flatten the curve of new infections, physical home showings were largely replaced with virtual ones – drastically lowering inventory levels across markets at lightning speed.
Taking all this into account, then housing crash of 2020 will likely be remembered more for its inability for people to physically view houses under extreme conditions rather than poor investment decisions from banks. All said, if anything positive can come out of this year’s tough times is an appreciation for simplicity – making smaller investments with tangible returns instead of trying for higher rewards with longer timelines – whether it comes down to personal spending or real estate investments
What Factors Are Impacting This Unique Economic Climate?
The world has been plunged into an unprecedented economic downturn due to the coronavirus pandemic, making it harder than ever for businesses and individuals to make ends meet. The current global economic climate is unique because of the simultaneous occurrence of so many different factors impacting it. These include:
1) Government Regulations – ocial distancing requirements and business closures have drastically curbed economic activity, reducing income sources and widening job losses around the world. Government stimulus packages have played a role in providing some relief but not enough to offset the forces that pushed the economy in a nosedive.
2) Supply Chain Disruptions- Many businesses have faced supply chain issues as air travel restrictions forced delays in importing goods from abroad. Global trade was instantly impacted as China recently became one of the worst-hit countries by this pandemic, disrupting supply chains worldwide
3) Decreased Consumer Spending – Restrictions on movement and daily activities meant that consumer spending dramatically decreased resulting in fewer purchases of goods and services, further affecting companies’ bottom line.
4) Stock Market Volatility – Amidst all this chaos, stock markets around the world experienced wild fluctuations which made it increasingly hard to predict what would happen next leading many investors to lose money or adopt more cautious investment strategies.
5) Oil Price War – In addition to disruption caused by coronavirus, Saudi Arabia’s sudden decision to launch an oil price war with Russia sent shockwaves throughout