Recessions are challenging times for many sectors, and the housing market is no exception. Understanding how the market behaves during these periods can help you make informed decisions whether you're buying or selling real estate in San Diego. Let's dive into what typically happens to the housing market during a recession and explore the pros and cons of buying and selling real estate in such times. What Happens to the San Diego Housing Market During a Recession? Decline in Home Prices : During a recession, home prices in San Diego often decline due to decreased consumer confidence and purchasing power. Economic uncertainty, job losses, and tighter lending standards make people hesitant to invest in new properties . Reduced Buyer Demand : With more people facing financial difficulties, the demand for homes typically drops. This reduced demand can lead to longer times on the market for sellers and potentially lower offers from buyers. Increased Supply : As demand decreases, the supply of homes on the market can increase. This is partly due to more foreclosures and distressed sales as homeowners struggle to keep up with mortgage payments. Volatile Market Conditions : Recessions bring volatility. While prices generally fall, they can also fluctuate based on local economic conditions, labor market outlook, and other factors.