George Santayana once wrote, “Those who cannot remember the past are condemned to repeat it.” We have been thinking about the parallels between the 2008 financial crisis and the current machinations of the current economy so we wanted to take a look back and we found this great synopsis of the events and timeline of 2008 and we mapped them to our graph of the 2007-2009 stock market crash.
We’ll start with a recent quote from the National Association of Realtors published on August 18, 2022.
Existing-home sales fell for the sixth consecutive month to a seasonally adjusted annual rate of 4.81 million. Sales were down 5.9% from June and 20.2% from one year ago. The median existing-home sales price climbed 10.8% from one year ago to $403,800. That’s down $10,000, however, from last month’s record high of $413,800.
Nar.Realtor
In contrast, in 2008 the following was reported:
“January’s existing home sales rate fell to its lowest level in 10 years. The 4.9 million rate was down 23.4%, according to the National Association of Realtors. Home prices fell to $201,100, down 4.6% from the prior year. Housing inventory was 4.19 million, a 10.3-month supply.”
In 2007 the Fed was raising interest rates, in 2022, the Fed is raising interest rates and it still has a way to go to contain inflation.
From January 2008 to February 2008, sales continue to plummet:
Home sales continued to plummet. February’s sales fell 24% year-over-year, reaching 5.03 million, according to the National Association of Realtors.
TheBalanceMoney.com
NAR won’t release August sales until late September but we’ll keep an eye on it to see if both the 2007 and 2022 trends continue in sync.
If events unfold similar to 2008 then we can expect a dramatic decline in housing sales for August and beyond. We don’t have enough information to be certain about anything right now but things are starting to unfold in a manner that we’ve seen before hence the purpose of this post to review what happened before and what might happen next.
In the meantime, stay tuned and stay solvent…