The national median house price began to slow down in the March 2008 quarter, when it rose only 0.8 per cent compared with a price increase of 3.7 per cent in the previous quarter. In the June quarter it fell 1.4 per cent, before falling another 2.1 per cent in the three months to September of that year.
Australia's housing prices have experienced the largest decline in a calendar year since the global financial crisis (GFC) in 2008, when home values fell 6.4 per cent nationally.
The housing market crash of 2008 remains one of the most significant events in the history of the United States housing market. It was caused by a combination of factors, including the subprime mortgage crisis, high levels of debt, and a lack of regulation in the financial sector.
The stock market crash that heralded the arrival of the recession occurred on September 29, 2008. The Dow Jones Industrial Average dropped 777.68 points by the time of closing. This was the largest drop in its history, even compared to the Wall Street crash of the 1920s that started the Great Depression.
According to the U.S. National Bureau of Economic Research (the official arbiter of U.S. recessions) the recession began in December 2007 and ended in June 2009, and thus extended over eighteen months.
The events of 2008 were too fast and tumultuous to bet on; but, according to CNN, Moody's and Goldman Sachs predict that 2023 won't see a thunderous crash like the one that sunk the global economy in 2008.
In a best-case scenario, the U.S. will likely see a 'soft landing' with low/slow growth across 2023 before picking up in 2024. However, a downside scenario is a real possibility and could see the U.S. enter a prolonged recession lasting well into 2024, as is currently forecast for the UK and Germany.
1. Warren Buffett. In October 2008, Warren Buffett published an article in the New York TimesOp-Ed section declaring he was buying American stocks during the equity downfall brought on by the credit crisis.
Investor Michael Burry, who rose to fame when he predicted the collapse of the U.S. housing bubble before the 2008 financial crisis, has warned that the U.S. economy is likely to enter a recession this year.
What Caused the 2008 Financial Crisis? The 2008 financial crisis began with cheap credit and lax lending standards that fueled a housing bubble. When the bubble burst, the banks were left holding trillions of dollars of worthless investments in subprime mortgages.
The bear market was confirmed in June 2008 when the Dow Jones Industrial Average (DJIA) had fallen 20% from its October 11, 2007 high. This followed the bull market of 2002–07 and was followed by the bull market of 2009–2020.
In September 2008, Congress approved the “Bailout Bill,” which provided $700 billion to add emergency liquidity to the markets. Through the Troubled Asset Relief Program (TARP) passed in October 2008, the U.S. Treasury added billions more to stabilize financial markets—including buying equity in banks.
Australia's GDP is expected to grow by 1.6 per cent in 2023, followed by 1.7 per cent in 2024. Despite the bleak outlook, Treasurer Jim Chalmers is confident Australia will avoid a recession. The state of Australia's economy depends largely on the RBA's cash rate decisions.
Home values fell 8.4 per cent nationally between May 2022 and January 2023. It's the deepest peak-to-trough fall on CoreLogic's records, which go back to 1980.
Australian property values experienced a downturn in 2022 and prices continue to fall—but predictions of the overall peak-to-trough price decline tend to vary between 15-25%. Read more about whether the Australian property market is going to crash.
The tally of millionaires slipped to 6.7 million in 2008 as the financial crisis struck.
Lehman Brothers went bankrupt. Merrill Lynch, AIG, Freddie Mac, Fannie Mae, HBOS, Royal Bank of Scotland, Bradford & Bingley, Fortis, Hypo and Alliance & Leicester all came within a whisker of doing so and had to be rescued.
In a recession, the rate of inflation tends to fall. This is because unemployment rises moderating wage inflation. Also with falling demand, firms respond by cutting prices. This fall in inflation can benefit those on fixed incomes or cash savings.
Following the 2024 recession, the economy is slated to improve, with rising trends anticipated for US GDP, US Industrial Production, and many individual industries and markets in 2025. This should continue through the rest of the 2020s, with the US economy rising at various rates during that time.
After peaking at 6.2% in 2022, we expect inflation to fall to 3.5% for 2023. Over 2024 to 2027, we expect inflation to average just 1.8%—below the Fed's 2% target.
The easiest way to get rich during a recession is to invest as much money into the stock market as you can. When there's a recession, stock market performance declines. Consumers spend less and companies earn less, causing investors to worry.
Business titans such as William Boeing and Walter Chrysler actually grew their fortunes during the Great Depression.
What are some examples of businesses that thrive in recession? Due to the elasticity of demand, recession-proof industries are usually in essential services, like health care, senior services, grocery stores, and maintenance, such as plumbing and electrical.