Yet, despite all the uncertainty, what happened in 2008 is actually different then what’s happening now and that’s a good thing for the real estate industry, real estate agents, and real estate consumers alike.
Here’s what you need to know:
1. The Great Recession was an economic driven crisis
Leading up to the Great Recession
, the real estate and mortgage industries were operating in an atmosphere much like the wild west. People were qualifying for mortgages that they shouldn’t have gotten and buying homes they couldn’t afford. It was a foundation built on shaky ground that was guaranteed to topple.
The crisis was the worst U.S. economic disaster since the Great Depression. The U.S. stock market tanked, losing nearly $8 trillion in value between late 2007 and 2009.
Unemployment skyrocketed, topping out at 10% in October 2009. As a country, our citizens lost $9.8 trillion in wealth as their home values took a nosedive and their retirement accounts literally evaporated into thin air.
Today, while corporate and personal finances are in tough shape for sure, they are not the cause of the issues we are experiencing now. This crisis is medical in nature and a result of circumstances that are, for the most part, out of our control. It has shut down the economy, but it will reopen again and the recovery should be faster and stronger
than it was in 2008.
2. Our financial institutions are in better shape
There were some serious liquidity problems that existed during the Great Recession. Banks of every size were closing and money was scarce. Things were so bad that one of Wall Street’s stalwart institutions, Lehman Brothers, which was, at the time, the fourth largest investment bank in the US, filed for bankruptcy.