Are we in a recession? The answer is yes we are but it's not the same type of recession that happened in 2008 that we're all very familiar with.
If we look back in time, the recession was created because people were upside-down on their homes. They borrowed more money than they possibly could ever afford to pay back by just selling their home which drove us into a foreclosure frenzy.
The difference between 2008 and today.
First we have to define what "crash" means. I can only assume that we're on the same page here that a housing crash implies that prices start to go down.
If the market crashes, homeowners might not make as much of a profit as they hoped they would when it comes time to sell. What you've got to keep in mind however, is the equity that has been accumulated.
More than half of all homeowners in the United States have already paid off over 50% of their mortgage. So, if the market starts to dip, homeowners can sell and still get to cash out without necessarily being upside-down.
Another interesting fact is about one quarter of all the homes in the United States have zero mortgage on it so I do not think we will be facing a world of foreclosures anytime soon.
So... Is the market going to crash? I don't know. But if it does, I'm going to get out there and buy more houses.
- Doug Edrington, CEO of Berkshire Hathaway HomeServices J Douglas Properties