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Half of the real estate economists and experts surveyed by Zillow this week believe that the next recession is coming in 2020, according to the second quarter Zillow Home Price Expectations Survey, released Thursday.

Of the 100 real estate experts surveyed, half said a recession was likely to come in 2020 with 19 percent specifically pinpointing the third quarter of 2020 — which lines up directly with the months leading up to the presidential election. Thirty-five percent of those surveyed said they believe a recession is likely in 2021, meaning 85 of 100 experts believe a recession is coming in the next two years.
But they don’t think housing will be the main cause.

“Panelists were asked to choose and rank up to three economic and/or political factors likely to trigger the next recession, from a list of 10,” the study states. “Trade policy, a geopolitical crisis and a stock market correction were the most commonly chosen factors, respectively.”

“A housing slowdown was among the factors rated as least likely to cause the next recession, chosen by just 12.6 percent panelists that offered an opinion,” the survey continues.

Although experts say housing won’t cause of the recession, the potential slowdown will have an impact. More than half of those surveyed said they expect homebuying demand in 2020 to be significantly lower than in 2019, while about a third of those surveyed said they expected it to be about the same.

“Home sales have been sluggish to start 2019 compared to the beginning of 2018, despite conditions that are more favorable for buyers now than they have been in quite some time,” the survey says.

The combination of slowing demand and an impending recession could be good news for potential buyers in the short-term and cause further slowdowns in overall U.S. home value appreciation going forward.

Home values are currently growing at a 6.1 percent annual pace, according to the survey, but growth has slowed in each of the past four months compared to the month prior. Panelists expect that trend to continue.

Panelists, on average, said they expect annual growth to be around 4.1 percent at the end of the year and slow further to 2.8 percent in 2020 and 2.5 percent in 2021.

The results of this year’s survey line up with a similar survey from May 2018, when more than half of the economists surveyed said they believed a recession was coming in 2020.

Email Patrick Kearns

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