On Monday, June 8, 2020, the National Bureau of Economic Research (NBER) announced that the U.S. economy is officially in a recession. This did not come as a surprise to many, as the Bureau defines a recession this way:
“A recession is a significant decline in economic activity spread across the economy, normally visible in production, employment, and other indicators. A recession begins when the economy reaches a peak of economic activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.”
Everyone realizes that the pandemic shut down the country earlier this year, causing a “significant decline in economic activity.” RCFEs are no exception. As of March 19, all Orange County RCFEs issued mandatory “No Visitor” policies, thereby ending all touring of RCFE facilities by would-be RCFE buyers.
Though not surprising, headlines announcing the country is in a recession will cause consumers to remember the devastating impact the last recession had on the housing market, and by extension, the market for RCFEs, just over a decade ago.
The real estate market, however, and the market for RCFEs, is in a totally different position than it was then. As Mark Fleming, Chief Economist at First American, explained:
“Many still bear scars from the Great Recession and may expect the housing market (and the market for RCFEs) to follow a similar trajectory in response to the coronavirus outbreak. But there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.”
Four major differences in today’s RCFE market are:
- RCFE owners have large sums of equity in their homes;
- We have a shortage of RCFE properties, not an overabundance;
- Irresponsible lending no longer exists;
- RCFE price appreciation is not out of control.
We must also realize that a recession does not mean a housing crash will follow. In three of the four previous recessions prior to 2008, RCFE home values increased. In the other one, home prices depreciated by only 1.9%.
Yes, we are now officially in a recession. However, unlike 2008, this time the housing industry and the market for RCFE homes is in much better shape to weather the storm. RCFE values are holding strong and are expected to continue appreciating for the foreseeable future.
If you are considering buying or selling an RCFE, turn to us, your experts at RCFE Resource. We can help guide you every step along the way. Or if you would like us to determine the value of your RCFE home and business, we’d be delighted to assist you. Call today to schedule your complimentary consultation:
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If we can be of assistance with your purchase, sale or lease of an RCFE or other property please call us today for your FREE Consultation:
Michelle (949) 397- 4506 & Melvyn (949) 500-3630