What do economists currently expect about the likelihood of a recession in the next year?

According to the latest Economic Forecasting Survey from the Wall Street Journal, less than half of economists (48%) believe a recession will occur within the next year—the first time the probability has dropped below 50% in over a year, down from 54% in July.

How does today's unemployment rate compare to historical averages and the 2008 crisis?

The current unemployment rate is significantly lower than both the 75-year average of 5.7% (dating back to 1948) and the 8.3% average during the 2008 financial crisis, suggesting foreclosure risk remains low even if job losses occur.

Why won't a potential recession necessarily crash the housing market?

Even if the projected modest increase in unemployment occurs, economists expect the rate to remain well below historical levels and far below the 8.3% threshold seen during the 2008 crisis—the point at which foreclosure waves severely impacted the housing market.

Is now a good time to buy or sell real estate in Telluride?

According to the post, with a stabilizing economy, limited housing supply, and motivated buyers in the market, the current environment presents a strong opportunity for both buyers and sellers in Telluride.

Why the Economy Won’t Tank the Housing Market

By Anne-Britt OstlundNovember 29, 20233 min read

Real Estate Market Updates

If you’re worried about a coming recession, you’re not alone. Over the past couple of years, there’s been a lot of recession talk. And many people worry, if we do have one, it would cause the unemployment rate to skyrocket. Some even fear that a spike in unemployment would lead to a rash of foreclosures similar to what happened 15 years ago.

However, the latest Economic Forecasting Survey from the Wall Street Journal (WSJ) reveals that, for the first time in over a year, less than half (48%) of economists believe a recession will actually occur within the next year:

“Economists are turning optimistic on the U.S. economy . . . economists lowered the probability of a recession within the next year, from 54% on average in July to a more optimistic 48%. That is the first time they have put the probability below 50% since the middle of last year.”

If over half of the experts no longer expect a recession within the next year, you might naturally think those same experts also don’t expect the unemployment rate to jump way up – and you’d be right. The graph below uses data from that same WSJ survey to show exactly what the economists project for the unemployment rate over the next three years (see graph below):

If those expert projections are correct, more people will lose their jobs in the upcoming year. And job losses of any kind are devastating for those people and their loved ones.

However, the question here is: will there be enough job losses to cause a wave of foreclosures that will crash the housing market? Based on historical context from Macrotrends and the Bureau of Labor Statistics (BLS), the answer is no. That’s because the unemployment rate is currently near all-time lows (see graph below):

As the orange bar in the graph shows, the average unemployment rate dating back to 1948 is 5.7%. The red bar shows, the last time the housing market crashed, in the immediate aftermath of the 2008 financial crisis, the average unemployment rate was up to 8.3%. Both of those bars are much higher than the unemployment rate today (shown in the blue bar).

Moving forward, projections show the unemployment rate is likely to stay beneath the 75-year average. And that means we won’t see a wave of foreclosures that would severely impact the housing market.

Bottom Line

In conclusion, as the economic landscape stabilizes and experts foresee a recession-free horizon in the next 12 months, the real estate market, particularly in Telluride, holds promise. With a positive outlook and a steady housing market, now could be an opportune time to explore your options, whether you're considering selling, buying, or investing in Telluride real estate.

For personalized insights and guidance tailored to your unique situation, consider reaching out to a trusted real estate partner. At Mountain Rose Realty, led by the experienced Anne-Britt Ostlund, we specialize in Telluride real estate, offering a wealth of knowledge and expertise to assist you in making informed decisions. Explore the current Telluride homes for sale and discover the potential that lies within this thriving market.

Don't let uncertainties hold you back; take advantage of the present scenario where motivated buyers abound, the supply of homes is still limited, and flexibility in showings prevails. Connect with Anne-Britt Ostlund and the dedicated team at Mountain Rose Realty to navigate the real estate landscape with confidence.

Whether you're selling your house or exploring new opportunities in Telluride, our team is here to guide you every step of the way. Stay ahead of the curve and make the most of the current real estate climate in Telluride, Colorado. Contact Mountain Rose Realty today for a personalized consultation and embark on your real estate journey with assurance and expertise.

Frequently Asked Questions

What do economists currently expect about the likelihood of a recession in the next year?: According to the latest Economic Forecasting Survey from the Wall Street Journal, less than half of economists (48%) believe a recession will occur within the next year—the first time the probability has dropped below 50% in over a year, down from 54% in July.
How does today's unemployment rate compare to historical averages and the 2008 crisis?: The current unemployment rate is significantly lower than both the 75-year average of 5.7% (dating back to 1948) and the 8.3% average during the 2008 financial crisis, suggesting foreclosure risk remains low even if job losses occur.
Why won't a potential recession necessarily crash the housing market?: Even if the projected modest increase in unemployment occurs, economists expect the rate to remain well below historical levels and far below the 8.3% threshold seen during the 2008 crisis—the point at which foreclosure waves severely impacted the housing market.
Is now a good time to buy or sell real estate in Telluride?: According to the post, with a stabilizing economy, limited housing supply, and motivated buyers in the market, the current environment presents a strong opportunity for both buyers and sellers in Telluride.