2008 notwithstanding, home is usually a good place to be in a recession.

The strong start to the 2020 real estate market was an encouraging sign for area homeowners. Then COVID-19 hit, and suddenly life is on hold for millions of Americans. Naturally, that raises questions about the long-term prospects for housing and homeownership.

But when it comes to real estate, many experts are looking at this soon-to-be-official recession differently than the last one. Here's a look at why the housing market may very well make a strong recovery and even be a driver of future economic growth.

Housing Stands Up To Recessions

Housing's role and impact in the 2008 financial crisis was so significant it's hard to write it off as an anomaly. But that's exactly what it was in terms of home prices. In fact, according to the CoreLogic Home Price Index, in three of the four recessions prior to 2008 national home prices actually rose – by 6.1% in 1980, 3.5% in 1981 and 6.6% in 2001. The only other time the HPI fell was 1991, when it declined by just 1.9%, and even then, five out of nine U.S. regions posted gains.

In an April 1 blog post, CoreLogic senior leader of science and analytics, Bin He, noted that the Fed's quick action in response to COVID-19 is reminiscent of steps it took after the dot-com bubble of 2001. "With the Fed's cutting the rate to zero and huge injection of liquidity, the home price path could be like what happened in 2001, but it's too early to speculate given the uncertainty about the length and severity of the pandemic," He wrote.

Record Equity

The 2008 recession was set off by an overheated housing market in which homebuyers were significantly overleveraged and underqualified. Many buyers were able to obtain mortgages despite bad credit, and some banks even loaned more than 100% of a home's purchase price. On top of that, owners were borrowing heavily against their residences, using home equity to pay for new cars, vacations and even additional houses.

By contrast, home equity has never been higher in America than it is right now. The record $6.3 trillion worth of home equity that Americans have today is more than double the 2009 level. And that's with homeownership rates that are lower now than they were back then and with price growth that has been slow in many markets including metro Chicago.

Bottom line: both the national and local housing markets are much more stable than they were in 2008.

Stimulus On Steroids

In February 2009, more than six months after the Great Recession had begun, Congress finally passed the American Recovery and Reinvestment Act (ARRA). In addition to tax cuts for most taxpayers, the bill included a one-time payment of $250 to recipients of Social Security, Supplemental Security Income, railroad retirees, and veterans.

By contrast, the $2.2 trillion CARES Act was enacted almost immediately upon understanding the potential economic impact of COVID-19. Today's stimulus delivers more aid, more quickly, to more people, with additional assistance now in the works.

The general consensus among today's policymakers is that the Fed wasn't aggressive enough in helping businesses and individuals weather and recover from the last recession. This time around, the Fed has said its ability to keep credit flowing is virtually unlimited, and that it will take a whatever-is-needed approach to supporting the economy. That goes for housing too.

Demand Squared

To say there was high supply and low demand for homes a decade ago would be an understatement. In fact, according to the Federal Reserve of St. Louis, in January 2009 there was a 12.2 Months' Supply of Inventory (MSI) in the market. Granted, the economy was in recession by then, but even two years earlier, when real estate was rocking, MSI topped 7 months thanks to torrid new-home construction. Today, the opposite conditions prevail. MSI was at 4.8 months in January 2020, and actual supply hit a record low in February.

That was heading into the pandemic, but what will demand look like coming out of it?

On the one hand, economic hardship will certainly take some potential homebuyers out of the market, but many other Americans are gaining a newfound appreciation for a place to call their own…perhaps one with an extra bedroom that can double as a home office or getaway space. Whereas "home" was a four-letter word back in 2008, today it's something for which many Americans are grateful, and to which many others aspire. Which is to say that demand will be quite strong for some time to come.

It's easy to draw connections between crises as serious as the 2008 recession and the current COVID -19 pandemic. However, when it comes to the housing market, these two moments in time are in fact quite different.