Since 1980, there have been 5 recessions in the United States. The median home price in Florida actually increased in 4 of the 5 recessions.

A recession is defined by the National Bureau of Economic Research (NBER) as, “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

The recession dates and lengths are shown in the chart below:

Below, I have analyzed the impact on the median home prices during the last 5 recessions.

During the last 5 recessions, the State of Florida’s median home price only decreased during The Great Recession (TGR) and increased an average of 7.09% in the remaining 4 recessions. The Tampa and Orlando MSAs have also experienced a similar pattern with only a decrease during the most recent recession.

Although The Great Recession officially ended in 2009, the median home prices in the Tampa MSA, Orlando MSA and the overall state continued to decline. Below is a chart illustrating the total decline from peak to trough, which typically ranged from 2007 to 2011.

We will eventually reach another recession; however, median home prices may not decrease, as indicated in 4 of the 5 previous recessions.

TGR occurred due to a significant amount of issues in the residential lending industry. Reports are not showing anything remotely similar to the prior peak; therefore, it is likely the next recession may not impact the median home prices in Florida.

Thank you for reading my article.

-Byron Torres, MAI

References

U.S. Federal Housing Finance Agency, All-Transactions House Price Index for Florida [FLSTHPI], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/FLSTHPI, February 16, 2019.

U.S. Federal Housing Finance Agency, All-Transactions House Price Index for Tampa-St. Petersburg-Clearwater, FL (MSA) [ATNHPIUS45300Q], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/ATNHPIUS45300Q, September 3, 2019.

U.S. Federal Housing Finance Agency, All-Transactions House Price Index for Orlando-Kissimmee-Sanford FL (MSA) [ATNHPIUS36740Q], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/ATNHPIUS36740Q, September 3, 2019.