Feeling anxious over reports of looming economic crash? Read this
With food and gas prices continuing to rise, anxiety of a housing market crash and recession are bubbling up to the surface.
York County would not be immune to such economic disasters — although local experts said there shouldn't be panic just yet.
Heading into 2022, the economic outlook in York County was positive. It was impossible to predict a war in Europe — which would be the contributor to high inflation and supply chain issues, said Kevin Schreiber, president and CEO of the York County Economic Alliance.
"I would definitely have the sense that more folks are approaching these next six months with a little bit more caution," Schreiber added, adding that it's tough for any economist to predict if things will get as bad as the 2008 housing crash and recession.
Though inflation is at an all time high, unemployment rates are at a "pretty solid level," similar to statistics pre-COVID-19. In March, inflation rose to 8.5% — setting a new record, according to a recent report by the YCEA.
The next six months will be critical for York County.
"I think people are really just trying, just now starting to figure out what that would mean for them, whether it's the banking industry or people in real estate development or construction," Schreiber said.
While the local housing market scene is steadily declining off the heels of a record-setting 2021, an increase in interest rates is responsible for the shifting mindset of prospective homeowners, according to Elle Hale, the president of the Realtors Association of York and Adams Counties.
In May, only 595 homes were sold — a 2% decrease from the same time last year. Since March, home sales have been on the decline, according to statistics provided by RAYAC.
"It's kind of a circular problem that we have," Hale said. "I think their concern is they can sell right now for great price, but they may not be able to purchase within their price range."
Hale said Realtors are not thinking that there will be a housing crash because the conditions aren't the same during this current market as they were before in 2008.
Practices like predatory lending and a surplus of inventory created the conditions leading to the 2008 recession, she said.
"Right now we don't have the high number of inventory and we don't have the issues with the loans and the foreclosures," Hale said. "So the conditions may seem like they're similar to a crash, but I don't think we're there."
With housing sales slowing down, Hale views it as a blessing in disguise.
"The multiple offer situation is falling down a little bit. It's not just 15 at a time like it was at the height of this current market," Hale said. "I think it's a good thing because I think that means that we're going to get more inventory. I think we're starting to slowly get back to what we in real estate would consider to be a normal market."
— Reach Tina Locurto at firstname.lastname@example.org or on Twitter at @tina_locurto.