{"id":32733,"date":"2022-08-22T10:50:31","date_gmt":"2022-08-22T17:50:31","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=32733"},"modified":"2026-04-14T01:38:14","modified_gmt":"2026-04-14T08:38:14","slug":"what-is-a-bear-market-in-real-estate","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/what-is-a-bear-market-in-real-estate\/","title":{"rendered":"What is a Bear Market in Real Estate? It\u2019s a Different Animal Than You May Think"},"content":{"rendered":"

The U.S. housing market is undergoing a rebalancing. Visit\u00a0HomeLight’s 2022 Housing Trends Hub<\/a>\u00a0for information on how to navigate a shifting market \u2014 whether you’re a seller, buyer, or homeowner.<\/em><\/p>\n

The U.S. economy has experienced some significant shifts this year. Inflation is at a 40-year high, interest rates are rising, and the stock market had its worst first-half performance since 1970.\u00a0<\/a><\/p>\n

Then, on June 13, 2022, the S&P 500 index fell 21.3% <\/a>and the stock market officially entered a bear market. We know this was bad news for the stock market, but what (if anything) does it mean for real estate? Here are the key things you need to know \u2014 as well as how to capitalize on any big changes that could be coming down the road.<\/p>\n

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What is a bear market in real estate?<\/h2>\n

According to Mike McElroy,<\/a> the managing broker for Center Coast Realty,<\/a> a bear market occurs when prices drop by more than 20%. Similarly, a bear market in real estate would be defined by housing prices falling by 20%. \u201cIt\u2019s important to note that this has only happened once in the real estate market <\/a>in at least 35 years,\u201d he says. \u201cIt\u2019s happened five times in the stock market over that same period.\u201d<\/p>\n

\u201cReal estate prices tend to be a lot steadier than other asset classes,\u201d McElroy adds.<\/p>\n

The last bear market in real estate occurred in 2008 when the housing bubble burst<\/a> \u2014 sending home values plunging and putting many homeowners into foreclosure. And while some homeowners and investors may be having flashbacks to those years as the market shifts, real estate and financial experts agree there\u2019s no reason to panic.<\/p>\n

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How Much Is Your Home Worth Now?<\/h3>\n

Get a near-instant home value estimate from HomeLight for free. Our tool analyzes the records of recently sold homes near you, your home\u2019s last sale price, and other market trends to provide a preliminary range of value in under two minutes.<\/p>\n \n

\n Get Estimate<\/a>\n <\/div>\n <\/div>\n<\/div>\n\n<\/p>\n

\u201cThis is very different from 2008,\u201d says Michael Collins<\/a>, a professor at Endicott College in Beverly, Massachusetts, as well as the founder and CEO of WinCap Financial.<\/a> \u201cAnyone who bought a house in the last three years has a ton of equity.\u201d<\/p>\n

\u201cA bear market is defined as a 20% decline in prices and we\u2019re certainly not seeing that in real estate,\u201d he says. \u201cWith inventory increasing, the asking prices might be lower. But that\u2019s not a real decline.\u201d<\/p>\n

On top of that, he says, there is still a housing inventory shortage, with demand continuing to outpace supply. \u201cThe prime American household formation age is in the early 30s. There are still a lot of individuals and young families who are in the market for their first home.\u201d<\/p>\n

Frank Procopio<\/a>, a real estate agent with over 17 years of experience in the Syracuse, New York, and Naples, Florida, real estate markets, agrees. \u201cI\u2019ve been getting calls saying that houses are dropping in value. However, what they\u2019re seeing is that houses aren\u2019t getting three times what they\u2019re worth like they were a year ago \u2014 they\u2019re getting two times what they’re worth instead.\u201d<\/p>\n

\u201cThere\u2019s a difference.\u201d<\/p>\n

\n Real estate has always been a proven asset. As cryptocurrency took off I actually saw a decrease in the number of my real estate investors because they poured all of their money into crypto. But the moment it crashed, they wanted to put it back into real estate.<\/q>\n
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