top of page

October 2022: Stop Bracing and Start Remembering

"Rejoice, rejoice! Bright days ahead!” How often does that kind of message show up in an economic forecast? If you follow the news regularly, for the sake of your own sanity, let the possibility of good swirl in your thoughts for a moment.

In normal times (if such a thing exists), steadfastness is a challenge. But we’ve endured three years of chaos, so if you’re feeling topsy turvy right now, that’s to be expected. I think as a society our collective nerves are pretty shot.

And when the world starts to feel wobbly, our first impulse is to summon our smartest fortune tellers so we can pin our hearts on short quotes from them, taken out of context, pasted into headlines.

I wonder if rather than filling our minds with forecasts—which depend on an ever-changing set of facts—we’re due for some remembering.

The doomsdayers are regulars in the media

First, remember this: every year there are folks—even smart folks—who will warn the sky is falling.

Don’t hear what I’m not saying. I’m not saying to bury your head in the sand, or deny that our economy is in turmoil, or go to great lengths to put spin on a negative situation.

What I am saying is that every year, smart people will make stark warnings that we’re on the verge of collapse. These people are most certainly in the mix today, and they will continue to sell fear for years to come. For whatever reason, pessimism sells better than optimism. I’m not advocating for purchasing either one; I’m simply advocating for being wise to that.

Most recessions don’t cause a housing reset

Next, remember that most recessions don’t mean a reset in the housing market. It’s at this point that we have to deal with our trauma-brain from the Great Recession. Core Logic reports that California home prices declined 42% in the Great Recession, far above the national average. Understandably, many of us probably have an implicit fear that something like this (or even mildly like it) might be in the cards should a recession hit.

I know it’s not a popular thing to do, but instead of validating your fears, I want to challenge them.

Since 1970, excluding the brief 3-month recession in early 2020, the U.S. has experienced seven recessions, as measured by the National Bureau of Economic

Research (NBER). Of all of these, only three led to declines in home prices.

See for yourself (data provided by the U.S. Census Bureau and U.S. Department of Housing and Urban Development). Here’s the change in median home value, peak to trough, in each recession:

Interesting, huh? In the last 50 years, home prices have more often made gains through recessions, than losses.

If you don’t trust median home prices as a reliable metric, check out the Case-Shiller National Home Price Index (HPI). I’ll even include the link: . The data doesn’t go back as far, but you’ll find much the same story.

The reason that home prices don’t typically take a dive during recessions is because they’re “sticky downwards.” This means they’re resistant from declining because homeowners are reluctant to sell their property for less than their neighbors’. That is, unless they’re forced to do so, like they were in the 2007-2009 period, due to the wave of foreclosures.

One might argue that relative to inflation, home values do go down in recessions. That’s true. “Real prices”—values relative to inflation—are not sticky and do go down or stagnate in recessions. But they do that in economic expansions too, and most homeowners only care about the actual price tag on the home; not how its price relates to inflation in the rest of the economy. When you look at homes on Zillow, you’re not seeing “real prices”; you’re seeing nominal prices, which is what most people care about.

Housing fundamentals are vastly improved

Remember this, too: homeowners are in a much better situation than they were in 2007. Homebuyers have been held to much higher standards since the Great Recession, and homeowners have far more equity than ever before. The conditions for a wave of forced sales are not present.

Home is a good thing. Invest in it.

Lastly, let’s remember what home has been the last three years: more than a financial vehicle, it’s been a shelter, a place of security, a haven from tumultuous days. It’s been a place to rest and recover from the wild ride going on in the world.

Sure, I think houses are good things financially to invest in—even in days like this—, but I believe investing in home is far more important these days.

The other day, my wife brought in a beautiful, massive dahlia from our garden and put it on my desk for me to enjoy. It literally took my breath away. That little injection of beauty in our home provided a sharp contrast to the fearful forecasts I’d been reading. It reminded me that in spite of all the doom and gloom being hawked, beauty springs up from the dirt.

So my unorthodox real estate agent advice? Invest in filling your home with beauty. When days are dark, we need reminders more than ever that beauty tends to sprout up in unlikely times and in unlikely places.

Oh, also remember: I’m always here for you if I can be of help.

Recent Posts

See All


bottom of page