Show Notes
The 2026 recession is here. You feel it. I feel it. GDP is growing, but the cost of living is rising, affordability is at a multi-decade low, and consumer sentiment is at its lowest level in 70 years. The stock market is ripping, but Americans are struggling daily. Economists will tell you it’s not a recession (at least not yet), but according to my recession indicator…we’re there.
Last November, I created a new recession indicator. It wasn’t tied to GDP, asset values, or sentiment. It was tied to the average American struggling to get by. As of last week, this recession indicator threw up a strong yellow flag, signaling that we’ve reached a turning point—and the direction we’re going isn’t giving us much hope.
This will affect the housing market and rent prices for real estate investors. I give my full forecast on how this could affect the market, but also share exactly what I’m doing right now to put myself in the best position to weather the storm and, hopefully, pick up discounted deals as they come along.
Well-situated investors can survive this, but those that are already running their portfolios with little wiggle room might be in for a big surprise.
In This Episode We Cover
The recession indicator that got triggered just last week (and what it means for the economy)
My new definition of “recession” and why we must rethink what a “recession” even is
How this new recession could hurt the housing market and investors
What I’m doing right now to prepare for the recession and put my portfolio in a strong position
A concerning data point about the affordability of average Americans (this includes renters)
And So Much More!
Links from the Show
Join the Future of Real Estate Investing with Fundrise
Join BiggerPockets for FREE
Join us at the BiggerPockets Conference October 2-4 in Orlando. Buy tickets
Sign Up for the On the Market Newsletter
Find an Investor-Friendly Agent in Your Area
Dave's BiggerPockets Profile
On the Market 372 - New Recession Indicator Shows Americans Worse Off Than We Thought
On the Market 413 - Real Estate Isn't as Safe From Inflation as You Think
Grab the Book, Recession-Proof Real Estate Investing
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-427.
Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices
More from On The Market
The affordability crisis isn’t improving. Gas is above $4 per gallon, inflation just hit 3.7%, and paychecks aren’t keeping pace. This is a tough spot for the American economy, but why does it feel like we’re getting hit on all sides of the affordability spectrum? Today, I’m breaking down the American household’s affordability crisis, and whether it’s a modern spending problem or something much, much deeper.
Commercial real estate prices have fallen 20%-50% from their peaks just a few years ago—but the slide may not be over yet. A “second wave” of the commercial real estate crash is on the horizon now that interest rates are back around 7.5%, and struggling multifamily, office, and commercial investors who thought a long-term refinance would save them are now in a stickier spot.
The housing market isn’t going back to “normal” anytime soon. In fact, it could take significantly longer than many of us thought. Rates are around 7.5%, median home prices hover near $400,000, but your salary is not keeping pace. Something needs to change: is it rates, prices, incomes, or a combination of all three?
A Fed official says what we’re all thinking: home prices must drop—and sellers seem to have gotten the message. Per a recent Redfin report, 44.7% of home sales included seller concessions such as price cuts, rate buydowns, covering closing costs, or even renovations, repairs, and expensive layout changes. So, if you’re a buyer, how do you get the most from your seller on the next deal?
America could enter what nobody wants—a “lost decade.”