The next recession will begin in 2020, according to real estate economists and experts in a poll sponsored by Zillow. A fifth of respondents targeted the third quarter as the likely beginning.
Thirty-five percent of panelists predicted that the current expansion would end in 2021.
Pulsenomics surveyed 112 real estate experts and economists in the second quarter about their expectations for the next recession and how homebuying demand would change through the end of 2020.
Survey respondents said the likeliest cause for the next recession would be trade policy, followed by a stock market correction and a geopolitical crisis. Only 12 respondents thought a housing slowdown would be a significant factor.
“Housing slowdowns have been a major component, if not catalyst, for economic recessions in the past, but that won’t be the case the next time around, primarily because housing will have worked out its kinks ahead of time,” Zillow’s director of economic research, Skylar Olsen, said in a statement.
“Housing markets across the country are already heading into a potential correction a solid year before the overall economy is expected to experience the same. The current housing slowdown is in some ways a return to balance that will help increase the resiliency of the housing market when the next recession does arrive.”
Effects on Housing Market
Zillow noted that even if a housing slowdown does not cause of the recession, the market will likely feel its effect.
Fifty-one percent of the panelists said they expected homebuying demand to be somewhat or significantly lower in 2020 compared with 2019, while only 17% said it would increase.
Homes will likely stay on the market longer, and bidding wars will become less common, Zillow said, citing 2011 as an example. That year, it took some 17 weeks to sell a home, compared with 11 weeks to close on a sale in 2018.