Episode 302: Understanding Real Estate in a Recession
In this episode of Hustle Humbly, we’re going back to school—economics class, that is! If you’ve ever struggled to explain what’s happening in the world and how it affects real estate, this episode is your crash course. We cover real estate in a recession and explore how broader economic forces like interest rates, tariffs, inflation, and consumer sentiment shape the market. Our goal is to equip you with plain-English explanations to confidently answer your clients’ questions.
Recession Reality: Why Real Estate Holds Steady
Alissa shares insights from her economics background, emphasizing that real estate often behaves differently than stocks during economic downturns. Despite 35 U.S. recessions over the last 160 years, housing typically remains stable. That’s because most people don’t buy homes as investments—they buy them to live in. Life events, not market shifts, usually drive buying and selling decisions. Understanding real estate in a recession means recognizing how housing stays resilient even when other assets falter.
Key Economic Indicators Every Agent Should Watch
We break down essential concepts like GDP (gross domestic product), employment, and wage growth. These data points offer clues about the overall economy and your local market. Alissa encourages checking your area’s economic health, especially in smaller towns or regions dependent on a single industry. Katy and Alissa also highlight the new term “personal recession,” explaining how economic downturns impact people differently depending on job security and lifestyle.
How Interest Rates Really Work
Mortgage rates are one of the most misunderstood topics in real estate. We unpack how interest rates are tied to inflation, the bond market, and especially the 10-year Treasury yield. You’ll hear expert insights from local lenders and learn why rates have remained unpredictable. Contrary to popular belief, when the Fed adjusts rates, it doesn’t directly impact mortgage rates. Knowing this helps agents correct misconceptions with their clients.
Tariffs, Materials, and Housing Costs
Tariffs are quietly influencing the cost of building and maintaining homes. Builders now face rising prices for materials like lumber, steel, and appliances. These costs trickle down to buyers and affect pricing strategies. In areas heavy on new construction, tariffs will hit especially hard. We share which states are most vulnerable and what agents need to do to stay prepared.
Consumer Confidence and Media Influence
Public sentiment plays a big role in economic activity. Negative news cycles can lead to decreased spending, which further slows the housing market. Katy and Alissa emphasize being informed rather than fearful, encouraging agents to rely on trusted data—not sensational headlines. Panic buying and spending freezes are real patterns driven by economic fear.
What Agents Must Do to Thrive
This is not the time for wishful thinking. Agents must shift from best-case planning to realistic, resilient business strategies. Newer agents especially need to prepare for less volume and tougher negotiations. But there’s good news—those who adapt, simplify, and stay educated will thrive. The strong, wise, and professional agents will rise to the top.
In Conclusion: Real Estate Is Still a Safe Bet
To end on a positive note: real estate is the single best hedge against inflation and recession, according to expert Jay Scott. Although your personal income may fluctuate, the housing market itself remains a reliable asset. Remember, the economy is cyclical, like an inchworm—it shrinks and grows. If you’re prepared, you’ll weather the storm and emerge stronger.
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