{"id":16765,"date":"2020-05-21T14:31:09","date_gmt":"2020-05-21T21:31:09","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=16765"},"modified":"2026-04-13T01:49:25","modified_gmt":"2026-04-13T08:49:25","slug":"sell-house-before-recession","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/sell-house-before-recession\/","title":{"rendered":"Should You Sell Your House Before a Recession Hits?"},"content":{"rendered":"

As the economy slowly reopens and we begin to assess the damage caused by COVID-19<\/a>, everyone is watching the numbers. A record 20.5 million<\/a> Americans lost their jobs in April, the stock market plummeted more than 20% <\/a>in mid-March, and as of May 11, the government had sent out $218 billion<\/a> in stimulus checks. But if you\u2019re a homeowner, particularly one who had been planning to sell, you\u2019re no doubt keeping a close eye on home prices.<\/p>\n

And you\u2019re likely wondering if you should hurry up and sell before a recession hits<\/a> \u2014 or hold off until some semblance of normalcy has returned. As with most decisions in real estate, the answer won\u2019t be the same for everyone, and there are a lot of factors to take into account.<\/p>\n

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<\/a> Source: (Larry Costales \/ Unsplash)<\/figcaption><\/figure>\n

Signs that a recession is coming<\/h2>\n

These days, you can\u2019t turn on the TV or click on a news website without coming across the spooky \u201cR-word\u201d \u2014 recession. Many analysts believe a recession is on the way, and some claim we\u2019re already in the midst of one<\/a>.<\/p>\n

It\u2019s normal for the economy to expand and contract over an extended period of time. Whether caused by a pandemic or a mortgage crisis, the contractions (recessions) can wreak financial havoc, often causing businesses to shut down, unemployment to spike and investment portfolios to plummet. But they\u2019re temporary \u2014 it might take a matter of months or years, but ultimately the economy will begin another expansion.<\/p>\n

The National Bureau of Economic Research<\/a> (NBER) is the entity that officially declares when a recession is in effect. The NBER defines a recession<\/a> as \u201ca significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP<\/a>, real income, employment, industrial production and wholesale-retail sales.\u201d It remains to be seen when or if the organization will declare that the economy is officially in a recession in the wake of COVID-19.<\/p>\n

How a recession could impact the housing market<\/h2>\n

The sweeping effects of a recession impact every aspect of the economy, including home prices. But the impact may manifest differently across various real estate markets.<\/p>\n

Early signs of resilience<\/h3>\n

Top-selling real estate agent Joanne McCoy<\/a> says that so far, her Lincoln, Nebraska market has been relatively sheltered from the effects. \u201cWe haven\u2019t experienced the dramatic price drops seen on the coasts or bigger markets,\u201d she notes. \u201cWe might see a 3% to 5% drop, where in good years, we might see an appreciation of 5% to 10%.\u201d<\/p>\n

McCoy doesn\u2019t believe the coronavirus crisis will cause a widespread housing crash. Even during periods of economic uncertainty, she predicts people will continue to seek out the benefits of homeownership.<\/p>\n

Kevin Kendrick<\/a>, a top agent in Orlando, Florida, has seen a slowdown in the market, but not a significant dip in listings. \u201cPeople are still buying and selling homes,\u201d he says.<\/p>\n

\u201cWe\u2019ve seen more of a reduction in physical showings than a reduction in offers.\u201d<\/p><\/blockquote>\n

According to some reports, home prices have actually increased during the crisis, amid a shrinking supply of homes and a drop in sales. According to the National Association of Realtors (NAR), the average home price increased by 6%<\/a> from last year, reaching $419,300.<\/p>\n

Uncertainty about the future<\/h3>\n

However, Jordan Shanbrom<\/a>, finance expert and life insurance specialist, notes that with such a large number of people being unemployed or having their wages reduced, there will likely be a dip in the number of qualified loans to buy homes, which may hurt buyer demand \u2014 and without demand, home prices will drop.<\/p>\n

\u201cAlong with this, we also have the issue of the economy being shut down for a long period of time and having major businesses shut down permanently,\u201d Shanbrom notes. \u201cThis means a lot of individuals who would have been interested in homeownership may abandon the idea, as they will either need to go get a job or start new businesses. Many will decide to rent during this process, and home purchases will suffer as a result.\u201d<\/p>\n

But there are glimmers of optimism. A report from First American Financial Services claims that a recession isn\u2019t likely to cause a major housing crash<\/a>. \u201cThe U.S. housing market has weathered all other recessions since 1980,\u201d notes Odeta Kushi, the author of the report. \u201cWith the exception of the Great Recession, house price appreciation hardly skipped a beat, and year-over-year existing-home sales growth barely declined in all the other previous recessions in the last 40 years.\u201d<\/p>\n

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<\/a> Source: (fran hogan \/ Unsplash)<\/figcaption><\/figure>\n

Should you sell before the recession or hold off?<\/h2>\n

If you\u2019ve been considering putting your house on the market, you might be wondering if an impending recession could or should weigh into your decision \u2014 and you\u2019re not alone.<\/p>\n

According to HomeLight\u2019s most recent survey data as of the week of May 13, just over half<\/a> of real estate agents say business is slower than normal, but that deals are still happening. Nearly a quarter report that they are actually seeing growth in their business, while 20% say<\/a> their sales have remained about the same as they were before the pandemic. Only 5% reported<\/a> that their business has come to a standstill.<\/p>\n

A survey by the National Association of Realtors in April of 2020, 41%<\/a> reported that sellers are delaying the sale of their homes for a couple of months, and another 7% are deciding not to sell indefinitely. Just over 30% say that sellers are continuing with the sale process, with nearly half of those sellers opting for contactless methods.<\/p>\n

Owen Dashner<\/a>, a real estate investor and partner with Red Ladder Property Solutions<\/a>, says that while home prices overall have not yet been significantly impacted by the pandemic in most markets, a housing market decline is likely coming, and it could be severe once the reality of closed businesses and job losses take hold.<\/p>\n

So is it best to act quickly and list before prices drop \u2014 or should you wait until the economy settles down a bit?<\/p>\n

The short answer: It depends.<\/p>\n

As is the case even during an economically stable time, there are many factors to consider when choosing to list your home, and no two situations are the same.<\/p>\n

Reasons you might want to sell now<\/h3>\n