Great first episode of State of the Market. Being that this was our first go, there were a few minor technical difficulties. But, none the less, Ben Bell offered up some very useful information regarding mortgage interest rates, the Fed fund rate, inflation and what a possible recession could mean for home values here in Atlanta.
Anytime that in the past that the Fed has raised interest rates to cool inflation it resulted in at least a minor recession. The Fed’s goal is always to seek a “soft landing”. But, that is almost impossible to achieve when the main tool at your disposal is designed to stop consumers from spending money.
The very interesting piece that Ben mentions in this episode is something that home owners and potential buyers should pay close attention to. That is, recession does NOT usually mean home values go down. In fact, the 2008 recession was the only time in the last 5 recessions, that home values did decrease. The issue there was that the recession was actually caused by artificially inflated home values and flawed, sometimes corrupt lending practices.
In today’s market, home prices have been driven up organically by basic supply and demand. During the last recession builders stopped building and are now play and never-ending game of catch up. I hope you found this information useful.
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