While most investors have the phrase 'past performance is not indicative of future results,' memorized, the truth is it can still help to look at the past to understand future performance, according to Omar Eltorai, market analyst at Reonomy.
"While the last recession is not the same as the current, it is still helpful to acknowledge the historical experience—even if only to bookend our expectations," Eltorai says. "This recession has different drivers which include a health crisis, business crisis, liquidity and solvency issues, shift in consumer behaviors and political disruption in both the foreign and domestic spheres."
Eltorai cites the cause of the crisis, consumer and business financial health preceding the crisis and the speed and scale of government intervention as the main differences between 2008 and today. "All of these differences mean that pricing will likely not move the same as the last recession," he says. "On one hand, the macroeconomic picture is much more dire than that of the last recession, which would suggest deeper and longer pricing declines."
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
